Common use of Physical Inventory Clause in Contracts

Physical Inventory. As of the date ten (10) business days prior to the Closing Date (the "Inventory Date"), Sellers shall have completed a physical inventory of the Inventory as of the date thereof for all locations and no sales of Inventory shall be made (other than at the Piaget Boutique or by the consignees holding Inventory as set forth below) after the date thereof. Buyer and its representatives shall be permitted to observe the taking of the physical inventory. Furthermore, Buyers and its representatives shall be permitted to conduct a pre- Closing audit of all physical inventory, including inventory counting and quality control, in the presence of Sellers and their representatives and may also conduct a pre-Closing and/or post-Closing audit of the Workpapers (as defined in Section 4.1(c)) and other documentation as reasonably requested by Buyer's representatives to complete Buyer's due diligence review as set forth in Section 7.4. All inventory count adjustments shall be agreed to at the time of the taking of the audit of physical inventory by Buyer so that such adjustments, if any, may be reflected in the Preliminary Draft Closing Statement (as defined below) and the Draft Closing Statement (as defined below). Except as provided hereunder, all Inventory on consignment pursuant to the Movado Consignment Contracts shall be recalled prior to the physical inventory. Notwithstanding the foregoing, Inventory on consignment pursuant to consignment agreements with the Neiman Marcus Group, shall remain in the possession of the Neiman Marcus Group, shall be included on the Preliminary Draft Closing Statement and the Draft Closing Statement based upon inventory records and shall be confirmed as soon as possible after the date hereof. Any Watches, Jewelry or Spare Parts returned prior to the Closing Date without proper authorization from Sellers shall be promptly returned by Sellers to the party attempting to return such item, and such item shall not be considered to be an item of Inventory nor shall there be any adjustment to Accounts Receivable with respect to such unauthorized return except as may be appropriate as a result of applying the confirmation procedures contemplated by Section 3.3.

Physical Inventory. As For purposes of calculating the Net Working Capital, the identification and valuation of the date ten (10) business days prior to Inventory purchased by Buyer hereunder and the inventory of Seller JV shall be determined based upon a physical inventory jointly conducted by Buyer and Seller on or before the Closing Date; provided, however, that the value of the Inventory set forth on the books of the Business as of the Closing Date and the inventory of Seller JV shall only be adjusted for (a) any quantity discrepancies and (b) any adjustments necessary to conform the "value of Inventory Date")to the Divisional Accounting Policies. If in connection with determining the Net Working Capital, Sellers Buyer determines in good faith that the inventory value of any inventory should be adjusted downward to conform to the Divisional Accounting Policies, then Seller shall have completed a physical inventory the option to exclude the affected Inventory not yet sold by Buyer from the Assets by written notice to Seller prior to calculation of the Net Working Capital, and promptly following such notice, such Inventory as of the date thereof for all locations will be transferred back to Seller and no sales of Inventory shall not be made (other than at the Piaget Boutique or by the consignees holding Inventory as set forth below) after the date thereof. Buyer and its representatives shall be permitted to observe the taking of the physical inventory. Furthermore, Buyers and its representatives shall be permitted to conduct a pre- Closing audit of all physical inventory, including inventory counting and quality control, included in the presence of Sellers and their representatives and may also conduct a pre-Closing and/or post-Closing audit of the Workpapers (as defined in Section 4.1(c)) and other documentation as reasonably requested by Buyer's representatives to complete Buyer's due diligence review as set forth in Section 7.4. All inventory count adjustments shall be agreed to at the time of the taking of the audit of physical inventory by Buyer so that such adjustments, if any, may be reflected in the Preliminary Draft Closing Statement (as defined below) and the Draft Closing Statement (as defined below). Except as provided hereunder, all Inventory on consignment pursuant to the Movado Consignment Contracts shall be recalled prior to the physical inventory. Notwithstanding the foregoing, Inventory on consignment pursuant to consignment agreements with the Neiman Marcus Group, shall remain in the possession of the Neiman Marcus Group, shall be Net Working Capital included on the Preliminary Draft Closing Statement Final Working Capital Schedule and thereafter not included in the Draft Closing Statement based upon definition of "Inventory" hereunder (any inventory records and so excluded being referred to as "Excluded Inventory"). At Seller's request, Buyer shall be confirmed as soon as possible use commercially reasonable efforts to sell any Excluded Inventory in the ordinary course of business for up to 120 days after the date hereof. Any Watches, Jewelry or Spare Parts returned prior to the Closing Date without proper authorization from Sellers and shall be promptly returned pay over to Seller the net proceeds of any such sale actually collected by Sellers to the party attempting to return such itemBuyer, less customer discounts and freight charges or any other amounts paid or payable by Buyer with respect thereto, and as to any unsold Excluded Inventory, Buyer shall make Excluded Inventory available to Seller, at Seller's expense, at the expiration of the 120-day period; provided, however, that Buyer shall have no liability to Seller if such item shall Excluded Inventory is not be considered to be an item sold or is sold at a discount with the prior written consent of Inventory nor shall there be any adjustment to Accounts Receivable with respect to such unauthorized return except as may be appropriate as a result of applying the confirmation procedures contemplated by Section 3.3Seller.

Physical Inventory. As At times agreeable to the parties prior to the Closing Date, a physical inventory (the “Physical Inventory”) will be taken of all Merchandise Inventory and supplies located at the Business. A separate Physical Inventory will be conducted at each of the date ten four business locations over four consecutive days with no more than one location inventoried per day. The Physical Inventory will be certified and taken by Progressive Inventory Service (10“Progressive”), provided that if Progressive cannot or will not agree in writing within three (3) business days prior to the Closing Date (date the "Physical Inventory Date"), Sellers shall have completed a physical inventory is scheduled that Progressive will furnish in writing values for the Merchandise Inventory broken down by section and by shelf immediately following completion of the Physical Inventory, then the Physical Inventory as will be conducted by another national inventory service selected mutually by the Buyer and the Sellers. The Buyer will pay one-half of the date thereof for all locations and no sales of Inventory shall be made (other than at the Piaget Boutique or by the consignees holding Inventory as set forth below) after the date thereof. Buyer and its representatives shall be permitted to observe the taking cost of the physical inventoryPhysical Inventory and the Sellers will pay one-half of the cost of the Physical Inventory. Furthermore, Buyers and its representatives shall The Physical Inventory will be permitted to conduct a pre- Closing audit of all physical inventory, including recorded on duplicate inventory counting and quality control, sheets in the presence of the Sellers and the Buyer or their representatives representatives, and may also conduct a pre-Closing and/or post-Closing audit copy of such inventory sheets will be furnished to the Sellers and the Buyer upon completion of the Workpapers (as defined in Section 4.1(c)) and other documentation as reasonably requested by Buyer's representatives to complete Buyer's due diligence review as set forth in Section 7.4Physical Inventory. All inventory count adjustments shall Excluded Pharmacy Purchase Agreement Parkway Drugs Rx Inventory or other merchandise that is not saleable (together, the “Excluded Inventory”) will be agreed excluded from the Physical Inventory and set aside. The Sellers will have the right to at remove all Excluded Inventory from the time Business within five (5) business days and to return the Excluded Inventory to Vendors or send it to a reclamation center for processing. Any Excluded Inventory not timely removed from the Business by the Sellers will be deemed abandoned and the Buyer may dispose of the taking Excluded Inventory as the Buyer deems appropriate and all proceeds from such disposition will belong to the Buyer. The purchase price for the Merchandise Inventory (the “Merchandise Inventory Price”) will be: (a) the actual cost paid by the Sellers for each item listed in the Physical Inventory after all discounts and rebates received or to be received by the Sellers are applied; plus (b) the actual cost to the Sellers of all additional Merchandise Inventory received at each Business location after the completion of the audit of physical inventory by Buyer so that Physical Inventory at such adjustments, if any, may be reflected in the Preliminary Draft Closing Statement (as defined below) location and the Draft Closing Statement (as defined below). Except as provided hereunder, all Inventory on consignment pursuant to the Movado Consignment Contracts shall be recalled prior to the physical inventory. Notwithstanding Time of Transfer, minus (c) the foregoing, actual cost to the Sellers of all additional Merchandise Inventory on consignment pursuant to consignment agreements with sold at each Business location after the Neiman Marcus Group, shall remain in the possession completion of the Neiman Marcus Group, shall be included on the Preliminary Draft Closing Statement Physical Inventory at such location and the Draft Closing Statement based upon inventory records and shall be confirmed as soon as possible after the date hereof. Any Watches, Jewelry or Spare Parts returned prior to the Closing Date without proper authorization from Sellers shall Time of Transfer. The parties anticipate that the amount of the Merchandise Inventory Price will be promptly returned by Sellers to the party attempting to return such item, and such item shall not be considered to be an item of Inventory nor shall there be any adjustment to Accounts Receivable with respect to such unauthorized return except as may be appropriate as a result of applying the confirmation procedures contemplated by Section 3.3approximately $2,500,000.00.

Physical Inventory. As Unless otherwise noted, all references in this SECTION 2.5 to "aggregate dollar amount" mean the aggregate dollar amount based upon 100% of the date ten (10) business days Warehouse Distributor Cost. Employees or representatives of Seller and Purchaser will jointly conduct a physical inventory count of, or other testing procedures for, the inventory at Purchased Locations, or mutually agree that Seller's inventory at a Purchased Location is accurate, in accordance with physical inventory procedures generally used in the industry, which physical inventory shall take place during the period prior to the Closing Date mutually agreed to by Purchaser and Seller (the "PHYSICAL INVENTORY PERIOD"). During the Physical Inventory DatePeriod, (i) Purchaser shall identify to Seller those items of inventory which Purchaser believes do not meet the criteria of Eligible Inventory, which designation shall be subject to Seller's confirmation, and (ii) Seller, with the assistance of Purchaser, shall prepare a written, itemized list of all inventory at Purchased Locations (the "FINAL INVENTORY SCHEDULE"), Sellers which Final Inventory Schedule shall have designate items of inventory as Eligible Inventory, Additional Inventory, or Beck Arnley/Hy-Test Inventory and identify items of inventory which axx xot listed on PIMS, and which shall be completed a physical inventory of not later than the Effective Date. The Final Inventory Schedule shall be adjusted as of the date thereof for all locations and no sales Effective Date by Seller with the assistance of Inventory shall be made (other than at Purchaser to reflect changes in inventory that occur during the Piaget Boutique or by the consignees holding Inventory as set forth below) period commencing immediately after the date thereof. Buyer and its representatives shall be permitted to observe the taking end of the Physical Inventory Period and ending on the Effective Date. Purchaser and Seller shall share equally all actual out-of-pocket expenses associated with the physical inventory. Furthermore, Buyers and its representatives shall be permitted to conduct a pre- Closing audit of all physical inventory, including inventory counting and quality control, in the presence of Sellers and their representatives and may also conduct a pre-Closing and/or post-Closing audit of the Workpapers (as defined in Section 4.1(c)) and other documentation as reasonably requested by Buyer's representatives to complete Buyer's due diligence review as set forth in Section 7.4. All inventory count adjustments shall be agreed to at the time of the taking of the audit of physical inventory by Buyer so that such adjustments, if any, may be reflected in the Preliminary Draft Closing Statement (as defined below) inventories taken and the Draft Closing Statement (as defined below). Except as provided hereunder, all Inventory on consignment preparation of schedules pursuant to the Movado Consignment Contracts shall be recalled prior to the physical inventory. Notwithstanding the foregoing, Inventory on consignment pursuant to consignment agreements with the Neiman Marcus Group, shall remain in the possession of the Neiman Marcus Group, shall be included on the Preliminary Draft Closing Statement and the Draft Closing Statement based upon inventory records and shall be confirmed as soon as possible after the date hereof. Any Watches, Jewelry or Spare Parts returned prior to the Closing Date without proper authorization from Sellers shall be promptly returned by Sellers to the party attempting to return such item, and such item shall not be considered to be an item of Inventory nor shall there be any adjustment to Accounts Receivable with respect to such unauthorized return except as may be appropriate as a result of applying the confirmation procedures contemplated by Section 3.3this SECTION 2.5.

Physical Inventory. As of the date ten (10) business days prior The value assigned to the Closing Date (the "Inventory Date"), Sellers shall have completed be determined pursuant to a physical inventory of the Inventory Stores taken by a team of RGIS or Xxxxxx (as of the date thereof for all locations and no sales of Inventory shall be made (other than at the Piaget Boutique or most recently used by the consignees holding particular Store) inventory takers (the "Inventory Service"), as set forth below) after in Section 6 below (or such other date and time as the date thereofparties shall mutually agree upon). Representatives of Buyer and its representatives Seller shall be permitted to observe present at the taking of the physical inventories to settle all disputes as to damaged, obsolete, unsalable or other items not to be included in the Inventory. All damaged or unsalable inventory. Furthermore, Buyers consigned inventory, inventory with expired "pull dates," prescription drugs carrying an expiration date that is within sixty (60) days after the Closing Date (as hereinafter defined), and its representatives so-called "private label" inventory of Seller, and any other items listed on Exhibit F attached hereto shall be excluded from the Inventory schedule and shall be removed by Seller prior to the Closing (as hereinafter defined). Buyer acknowledges and agrees that during the 30-day period preceding the Closing, Seller is permitted to conduct a pre- Closing audit of all physical inventory, including sell-down its inventory counting and quality control, not included in the presence of Sellers Inventory to be purchased by Buyer under this Contract. Buyer and their representatives and may also conduct a preSeller shall each pay one-Closing and/or post-Closing audit half of the Workpapers (as defined in Section 4.1(c)) costs for the services of the inventory takers. Buyer and other documentation as reasonably requested by Seller agree that all economic operations of the Stores and all deliveries of Inventory to the Stores from and after the Closing Date shall be for the account of Buyer or Buyer's representatives designee, as the case may be, except that which was ordered by Seller, such that any Inventory ordered by Seller prior to complete Buyer's due diligence review the Closing Date, but which does not arrive until after the Closing Date, shall be the 3 property of Seller. The sales price for the Inventory shall be determined as set forth in Section 7.4on Exhibit F. Buyer and Seller agree to execute, effective as of the Closing Date, a resale certificate(s) for the Inventory if required by the State of Ohio or Michigan, as applicable. All inventory count adjustments shall be agreed to at the time As soon as practicable following completion of the taking of the audit physical inventories of the Store, the Inventory Service shall prepare and furnish to Seller and Buyer a detailed accounting of the computation of the value of the Inventory for the Stores, taking the results of the physical inventory by counts of the Inventory and applying the formulas set forth on Exhibit F. Seller and Buyer so that shall then have five (5) business days after its receipt of such adjustmentsdetailed accounting in which to examine such accounting, if anyduring which time Buyer and Seller shall reasonably cooperate to resolve any computational errors or discrepancies. If Seller and Buyer are unable to resolve any such errors or discrepancies on mutually agreeable terms, may then the matter shall be reflected in the Preliminary Draft Closing Statement (as defined below) and the Draft Closing Statement (as defined below). Except as provided hereunder, all Inventory on consignment pursuant submitted to the Movado Consignment Contracts Inventory Service for final determination, which determination shall be recalled prior binding upon Seller and Buyer and not subject to the physical inventory. Notwithstanding the foregoing, Inventory on consignment pursuant to consignment agreements with the Neiman Marcus Group, shall remain in the possession of the Neiman Marcus Group, shall be included on the Preliminary Draft Closing Statement and the Draft Closing Statement based upon inventory records and shall be confirmed as soon as possible after the date hereof. Any Watches, Jewelry or Spare Parts returned prior to the Closing Date without proper authorization from Sellers shall be promptly returned by Sellers to the party attempting to return such item, and such item shall not be considered to be an item of Inventory nor shall there be any adjustment to Accounts Receivable with respect to such unauthorized return except as may be appropriate as a result of applying the confirmation procedures contemplated by Section 3.3further review.

Physical Inventory. As of the date ten (10) business days Immediately prior to the Closing Date (the "Inventory Date")Closing, Sellers shall have completed representatives of Seller and Buyer will jointly conduct a physical inventory of the Inventory as and any determinations jointly made and agreed upon by the representatives of Buyer and Seller during such physical inventory with respect to the date thereof for all locations and no sales quantity or quality of any items of Inventory shall be made (other than final and binding upon the parties. In addition, Seller shall also cause the warehousemen at the Piaget Boutique or by Distribution Warehouses to confirm in writing to Buyer the consignees holding quantities of Inventory located at such Distribution Warehouses as set forth below) after of the date thereof. Buyer Closing (and its representatives only such amounts as are confirmed in writing shall be permitted to observe the taking treated as delivered for purposes of the physical inventory. Furthermore, Buyers Sections 3.9 and its representatives shall be permitted to conduct a pre- Closing audit of all physical inventory, including inventory counting and quality control, in the presence of Sellers and their representatives and may also conduct a pre-Closing and/or post-Closing audit of the Workpapers (as defined in Section 4.1(c6.2(e)) and other documentation as reasonably cause the warehousemen at the Distribution Warehouses to permit Buyer to inspect the Inventory located at such Distribution Warehouses, if requested by Buyer's . In the event of any disagreements among the representatives to complete Buyer's due diligence review as set forth in Section 7.4. All inventory count adjustments shall be agreed to at the time of the taking of the audit of Buyer and Seller during such physical inventory by Buyer so that such adjustments, if any, may be reflected in the Preliminary Draft Closing Statement (as defined below) and the Draft Closing Statement (as defined below). Except as provided hereunder, all Inventory on consignment pursuant to the Movado Consignment Contracts shall be recalled prior to the physical inventory. Notwithstanding the foregoing, Inventory on consignment pursuant to consignment agreements with the Neiman Marcus Group, shall remain in the possession of the Neiman Marcus Group, shall be included on the Preliminary Draft Closing Statement and the Draft Closing Statement based upon inventory records and shall be confirmed as soon as possible after the date hereof. Any Watches, Jewelry or Spare Parts returned prior to the Closing Date without proper authorization from Sellers shall be promptly returned by Sellers to the party attempting to return such item, and such item shall not be considered to be an item of Inventory nor shall there be any adjustment to Accounts Receivable with respect to the quantity or quality of any items of Inventory, the parties shall record the matter of disagreement in writing and segregate the items of Inventory to which such unauthorized disagreement relates from the remaining items of Inventory. To the extent that any such disagreement relates to cores, Buyer and Seller shall promptly select a mutually acceptable (each acting reasonably) third party engaged in the business of supplying cores for Products to examine the cores at issue and resolve the disagreement, and the determination of such third party shall be conclusive and binding upon the parties. The parties shall each be responsible for payment of one-half of any amounts charged by such third party. To the extent that any such disagreement relates to Inventory other than cores and does not materially alter the Purchase Price in the aggregate, Buyer may make the final determination in good faith after consultation with Seller, and to the extent that any determination with respect to the quality of Inventory is adverse to Seller, Seller shall be entitled to the return except as may of the disputed items of Inventory, whereupon such items shall be appropriate as a result of applying deemed excluded from the confirmation procedures contemplated by Section 3.3Inventory for all purposes hereunder.

Physical Inventory. As (a) Commencing on the first day after the Closing Date, Seller and Purchaser shall cause to be taken a SKU level physical inventory of the date ten Merchandise (10the “Inventory Taking”), which Inventory Taking shall be completed no later than thirty (30) business days prior to after the Closing Date (the "“Inventory Completion Date")”, Sellers shall have completed a physical inventory and the date of the Inventory as Taking at each of the date thereof Stores and the Distribution Center being the “Inventory Date” for all locations each such Store and Distribution Center). Seller and Purchaser shall jointly employ a mutually acceptable independent inventory taking service (the “Inventory Taking Service”) to conduct the Inventory Taking, or if Seller 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 Seller and Purchaser. Purchaser and Seller shall each be responsible for 50% 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 Seller and Purchaser shall bear their respective costs and expenses incurred in the Inventory Taking. Seller 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 Stores and the Distribution Center, the applicable location shall be closed to the public and no sales of Inventory or other transactions shall be made (other than conducted until the Inventory Taking at the Piaget Boutique or by the consignees holding Inventory as set forth below) after the date thereof. Buyer and its representatives shall be permitted to observe the taking of the physical inventory. Furthermore, Buyers and its representatives shall be permitted to conduct a pre- Closing audit of all physical inventory, including inventory counting and quality control, in the presence of Sellers and their representatives and may also conduct a pre-Closing and/or post-Closing audit of the Workpapers (as defined in Section 4.1(c)) and other documentation as reasonably requested by Buyer's representatives to complete Buyer's due diligence review as set forth in Section 7.4. All inventory count adjustments shall be agreed to at the time of the taking of the audit of physical inventory by Buyer so that such adjustments, if any, may be reflected in the Preliminary Draft Closing Statement (as defined below) and the Draft Closing Statement (as defined below). Except as provided hereunder, all Inventory on consignment pursuant to the Movado Consignment Contracts shall be recalled prior to the physical inventory. Notwithstanding the foregoing, Inventory on consignment pursuant to consignment agreements with the Neiman Marcus Group, shall remain in the possession of the Neiman Marcus Group, shall be included on the Preliminary Draft Closing Statement and the Draft Closing Statement based upon inventory records and shall be confirmed as soon as possible after the date hereof. Any Watches, Jewelry or Spare Parts returned prior to the Closing Date without proper authorization from Sellers shall be promptly returned by Sellers to the party attempting to return such item, and such item shall not be considered to be an item of Inventory nor shall there be any adjustment to Accounts Receivable with respect to such unauthorized return except as may be appropriate as a result of applying the confirmation procedures contemplated by Section 3.3location has been completed.