Common use of Inventory Adjustment Clause in Contracts

Inventory Adjustment. (a) To the extent that the Inventory Amount (as defined below) as of the Closing Date, exceeds $1,700,000, the Tentative Purchase Price shall be increased by the amount of such excess, and to the extent that the Inventory Amount is less than $1,700,000, the Tentative Purchase Price shall be decreased by the amount of such deficiency (such positive or negative amount hereinafter referred to as the “Inventory Adjustment Amount”). For purposes hereof, “Inventory Amount” means (i) the cost of the inventory as of the Closing Date, as determined in accordance with the provisions of this Section 2.2 below and consistent with the methodology used in preparing the November 30, 2006 Financial Statements (as defined in Section 3.5), which the parties acknowledge and agree includes certain allocated charges above just the purchase cost, except that no adjustment will be made to reflect any market pricing of the Inventory, multiplied by (ii) 0.9. (b) A physical inventory shall be conducted in good faith by the parties as of the Closing Date (which the parties will begin on June 29) for purposes of determining the Inventory Amount. The Inventory Amount shall be determined based on such physical inventory using the aggregate cost of Annaco’s Inventory as of the Effective Time calculated in the manner described in this Section 2.2, and the Inventory Adjustment Amount, as so determined, shall be added to or deducted from the Tentative Purchase Price, as the case may be, based on such calculation. (c) Annaco and Buyer will attempt in good faith to agree on the Inventory Amount and the Inventory Adjustment Amount as of the Effective Time before the Closing Date. If the parties cannot agree on the Inventory Amount and the Inventory Adjustment Amount before the Closing Date, each of Annaco and Buyer will (i) for a period of thirty (30) days following the Closing Date, cooperate in good faith to mutually agree upon the Inventory Amount and the Inventory Adjustment Amount and (ii) if the parties cannot reach an agreement during such thirty (30) day period, submit its determination of the Inventory Amount to a mutually agreed upon referee (the “Referee”) and the Referee shall make the final determination thereof. Such determination shall be made in accordance with the provisions hereof within 30 days after submission to the Referee; and the Referee’s determination shall be final, conclusive and binding on Annaco and Buyer. Buyer and Annaco agree to share equally the cost and expenses of the Referee, but each party shall bear its own legal and other expenses, if any. (d) If Annaco and Buyer do not agree upon the Inventory Amount on the Closing Date, Buyer will pay Sellers an amount at Closing based on an estimated Inventory Adjustment Amount equal to $2,350,000 (which assumes an Inventory Amount equal to $4,500,000 x 0.9 = $4,050,000) (the “Estimated Inventory Adjustment Amount”). Following the determination of the Inventory Amount by the parties or the Referee, as the case may be, after Closing, payment of the difference between the actual Inventory Adjustment Amount and the Estimated Inventory Adjustment Amount paid at Closing shall be made by Buyer to Annaco or Annaco to Buyer by wire transfer within 15 days after the final determination of the Inventory Amount by the parties or the Referee, as the case may be.

Inventory Adjustment. (a) To the extent that the Inventory Amount (as defined below) as of the Closing Date, exceeds $1,700,000, the Tentative The Purchase Price shall be increased adjusted upward or downward by the an amount of such excess, and (“Inventory Adjustment”) equal to the extent that value of the Inventory Amount is less than $1,700,000, the Tentative Purchase Price shall be decreased by the amount of such deficiency (such positive or negative amount hereinafter referred to as the “Inventory Adjustment Amount”). For purposes hereof, “Inventory Amount” means (i) the cost of the inventory as of the Closing Date, as determined in accordance with the provisions of this Section 2.2 below and consistent with the methodology used in preparing the November 30, 2006 Financial Statements (as defined in Section 3.5), which the parties acknowledge and agree includes certain allocated charges above just the purchase cost, except that no adjustment will be made to reflect any market pricing of the Inventory, multiplied by (ii) 0.9. (b) A physical inventory shall be conducted in good faith by the parties Business as of the Closing Date (which the parties will begin on June 29“Closing Inventory Value”) for purposes minus $994,808.81, the value of determining the Inventory Amount. The Inventory Amount shall be determined based on such physical inventory using of the aggregate cost of Annaco’s Inventory Business as of June 30, 2011 as set forth on Schedule 3.3(a). Following the Effective Time calculated Closing, in the manner described in this Section 2.2accordance with Sections 3.3(b) and (c) below, Purchaser shall determine Closing Inventory Value and the Inventory Adjustment Amount, as so determined, shall be added to or deducted from the Tentative Purchase Price, as the case may be, based on such calculation. (c) Annaco and Buyer will attempt in good faith to agree on the Inventory Amount and the Inventory Adjustment Amount as of the Effective Time before the Closing Date. If the parties cannot agree on the Inventory Amount and the Inventory Adjustment Amount before the Closing Date, each of Annaco and Buyer will (i) for a period of thirty (30) days following the Closing Date, cooperate in good faith to mutually agree upon the Inventory Amount and the Inventory Adjustment Amount and (ii) if the parties cannot reach an agreement during such thirty (30) day period, submit its determination of the Inventory Amount to a mutually agreed upon referee (the “Referee”) and the Referee shall make the final determination thereof. Such determination shall be made in accordance with the provisions hereof within 30 days after submission to the Referee; and the Referee’s determination shall be final, conclusive and binding on Annaco and Buyer. Buyer and Annaco agree to share equally the cost and expenses of the Referee, but each party shall bear its own legal and other expensesAdjustment, if any. (db) If Annaco and Buyer do not agree upon the Inventory Amount on Within thirty (30) days after the Closing Date, Buyer Purchaser will pay Sellers an amount at prepare, and cause to be delivered to Seller, a computation of the Closing based on an estimated Inventory Adjustment Amount equal to $2,350,000 (which assumes an Inventory Amount equal to $4,500,000 x 0.9 = $4,050,000) (the “Estimated Inventory Adjustment Amount”). Following the determination Value and a written calculation of the Inventory Amount Adjustment, if any. Each party shall fully cooperate in providing the other parties with reasonable access to all data and other information necessary to determine such amounts. Purchaser’s calculation of any Inventory Adjustment, if any, shall become final and binding on the thirtieth (30th) day after delivery to Seller, except to the extent, if any, that Purchaser receives written notice from Seller prior to such date identifying a dispute of the Inventory Adjustment and the extent and nature of such dispute. (c) All quantities of Inventory to be included in the calculation of Closing Inventory Value shall be determined by the physical count conducted by the parties’ on-site authorized Representatives as soon as practicable, but in any event within five (5) Business Days, after the Closing Date, provided that such count shall be adjusted to reflect any transactions affecting Inventory from the Closing Date through such count. In the event of any dispute between the parties concerning the quantity of any Inventory, the parties shall, if such dispute remains unresolved upon the expiration of fifteen (15) Business Days following the Closing Date (during which fifteen (15) Business Day period, the parties shall use good faith efforts to resolve such dispute), hire ParenteBeard (“Designated Expert”) to determine the Closing Date quantities of Inventory. If the Designated Expert is unavailable for whatever reason, and the parties are unable to agree on a replacement, then they will petition a court of competent jurisdiction to select the most competent and qualified independent expert from a list submitted by each. The Designated Expert’s calculation of the disputed quantities shall not be less than the lowest amount, nor higher than the highest amount, proposed by Purchaser and Seller. All quantities determined by the expert so chosen shall be final and binding on the parties, with the cost of such work allocated to each party based on the proportion by which the amount in dispute was determined in favor of one party or the Refereeother. (d) Within five (5) Business Days after the Inventory Adjustment becomes final and binding pursuant to this Section 3.3; (i) if the amount of the Inventory Adjustment is a positive number, Purchaser shall pay to Seller, as an adjustment to the case may bePurchase Price, after Closing, payment of an amount equal to the difference between the actual Inventory Adjustment Amount and the Estimated Inventory Adjustment Amount paid at Closing shall be made by Buyer to Annaco or Annaco to Buyer by wire transfer within 15 days after in immediately available funds; or (ii) if the final determination amount of the Inventory Amount by the parties or the RefereeAdjustment is a negative number, Seller shall pay to Purchaser, as an adjustment to the case may bePurchase Price, an amount equal to the Inventory Adjustment by wire transfer in immediately available funds.

Inventory Adjustment. (a) To On or prior to the extent that Closing Date, the SELLER and the BUYER shall jointly conduct a physical count of the Inventory Amount (as defined below) as of the Closing Date, exceeds $1,700,000, Date and the Tentative Purchase Price BUYER shall make or cause to be increased by the amount made a calculation of such excess, and to the extent that the Inventory Amount is less than $1,700,000, the Tentative Purchase Price shall be decreased by the amount of such deficiency (such positive or negative amount hereinafter referred to as the “Inventory Adjustment Amount”). For purposes hereof, “Inventory Amount” means (i) the cost of the inventory as of the Closing Date, as determined in accordance with the provisions of this Section 2.2 below and consistent with the methodology used in preparing the November 30, 2006 Financial Statements (as defined in Section 3.5), which the parties acknowledge and agree includes certain allocated charges above just the purchase cost, except that no adjustment will be made to reflect any market pricing of the Inventory, multiplied by (ii) 0.9. (b) A physical inventory shall be conducted in good faith by the parties value as of the Closing Date (which the (i) the parties will begin on June 29) for purposes of determining the Inventory Amount. The Inventory Amount Calculation shall be determined based on such physical inventory using reduced by the aggregate cost value of Annaco’s (a) Inventory as that is adulterated or is otherwise not of the Effective Time calculated good and merchantable quality, and (b) all finished goods Inventory that has a shelf-life expiration date of less than twelve (12) months (or, in the manner described in this Section 2.2case of BAN clear roll-on, and the Inventory Adjustment Amount, as so determined, shall be added to or deducted six (6) months) from the Tentative Purchase Price, as the case may be, based on such calculation. (c) Annaco and Buyer will attempt in good faith to agree on the Inventory Amount and the Inventory Adjustment Amount as of the Effective Time before the Closing Date. If the parties cannot agree on the Inventory Amount and the Inventory Adjustment Amount before the Closing Date, in each case net of Annaco any reserves for such items included in the Calculation; and Buyer will (iii) the Calculation shall be reduced by 50% of the value of any Inventory that exceeds a twelve (12) month supply (as measured on the basis of sales for the six (6) month period preceding the Closing Date, other than BAN Naturals, which shall be measured on the basis of projected sales for the period June 1, 2000 through November 30, 2000 as set forth on Schedule 2.2), to the extent of such excess, but in no event shall the Calculation include an amount greater than 50% of the standard cost for such excess items. For purposes of the Calculation, all "twin-pack" or similarly packaged items shall be treated as separate stock items. The BUYER shall also provide SELLER with copies of the Calculation and all work papers associated therewith within fifteen (15) days after the Closing Date. (b) SELLER shall have a period of thirty (30) days following in which to review the Closing Date, cooperate in good faith to mutually agree upon the Inventory Amount Calculation and the Inventory Adjustment Amount work papers associated therewith provided by the BUYER. If the SELLER disagrees with all or any part of the Calculation, the SELLER shall have the right to notify BUYER in writing of such disagreement and SELLER'S reasons for so disagreeing, in which case the SELLER and the BUYER shall attempt to resolve the disagreement. If within fifteen (ii15) days after receipt by BUYER of such notice, the SELLER and the BUYER are unable to resolve the differences, if any, arising as a result of the parties cannot reach an agreement during Calculation, they or either of them shall submit a statement of all unresolved differences together with copies of the Calculation to Ernst & Young LLP or such other independent accounting firm as shall be mutually agreed (the "Accountants") for a binding and nonappealable determination to be rendered within thirty (30) day period, submit its determination of the Inventory Amount to a mutually agreed upon referee (the “Referee”) and the Referee shall make the final determination thereof. Such determination shall be made in accordance with the provisions hereof within 30 days after submission to the Referee; and the Referee’s determination shall be final, conclusive and binding on Annaco and Buyersuch submission. Buyer and Annaco agree to share equally the cost All fees and expenses of the Referee, but each party Accountants incurred in this capacity shall bear its own legal be billed to and other expenses, if anyshared equally by the SELLER and the BUYER. (dc) If Annaco and Buyer do not agree upon the Inventory Amount on the Closing Date, Buyer will pay Sellers an amount at Closing based on an estimated Inventory Adjustment Amount equal to $2,350,000 (which assumes Calculation reflects an Inventory Amount equal to value that is either less than or in excess of $4,500,000 x 0.9 = $4,050,000) (5,507,252, the “Estimated Inventory Adjustment Amount”). Following the determination of the Inventory Amount by the parties Purchase Price will be reduced or the Refereeincreased dollar-for-dollar, as the case may be, after Closingby the amount of such difference, payment of the difference between the actual Inventory Adjustment Amount and the Estimated Inventory Adjustment Amount paid at Closing shall be made by Buyer BUYER will pay the amount of any such increase to Annaco the SELLER or Annaco the SELLER will pay the amount of any such decrease to Buyer by wire transfer the BUYER, in immediately available funds, within 15 five business days after the final determination of the Inventory Amount by the parties or the Referee, as the case may bevalue.

Inventory Adjustment. (a) To the extent that the Inventory Amount As soon as practicable after Closing, but in any event not later than thirty (as defined below30) as of the Closing Date, exceeds $1,700,000days thereafter, the Tentative Purchase Price parties shall be increased by the amount of such excess, and to the extent that the Inventory Amount is less than $1,700,000, the Tentative Purchase Price shall be decreased by the amount of such deficiency jointly conduct a physical count (such positive or negative amount hereinafter referred to as the “Inventory Adjustment Amount”). For purposes hereof, “Inventory Amount” means (i) the cost of the inventory as of the Closing Date, as determined in accordance with the provisions of this Section 2.2 below and consistent with the methodology used in preparing the November 30, 2006 Financial Statements (as defined in Section 3.5), which the parties acknowledge and agree includes certain allocated charges above just the purchase cost, except that no adjustment will be made to reflect any market pricing of the Inventory, multiplied by (ii) 0.9. (b) A physical inventory shall be conducted in good faith a cycle count if so agreed by the parties as and acceptable to the Purchasers’ auditors) of the Closing Date (which the parties will begin on June 29) for purposes of determining the Inventory AmountBrand Inventory. The Inventory Amount shall be determined based on Based upon such physical inventory using the aggregate cost of Annaco’s Inventory as of the Effective Time calculated in the manner described in this Section 2.2, and the Inventory Adjustment Amount, as so determined, shall be added to count (or deducted from the Tentative Purchase Pricecycle count, as the case may be) and the Reserve Certification furnished by the Sellers at Closing pursuant to Section 7.4(m), based on the parties shall calculate the net book value of the Brand Inventory (the “Closing Inventory Value”). Each party shall make available to the other party upon request copies of the work papers used in its calculations. (b) In the event of any difference in the parties’ calculations of the Closing Inventory Value, the parties shall attempt in good faith to reconcile such calculationdifferences. If such differences remain unreconciled after ten (10) days, the parties shall submit a statement of all unresolved differences together with copies of their respective calculations and work papers, to PricewaterhouseCoopers LLP (the “Accountants”) for a binding and nonappealable determination of the Closing Inventory Value to be rendered within thirty (30) days after such submission. All fees of the Accountants incurred in this capacity shall be billed to and shared equally by the Sellers and the Purchasers. (c) Annaco and Buyer will attempt in good faith to agree on For purposes of determining the Purchase Price, if the Inventory Amount and the Inventory Adjustment Amount as of the Effective Time before Value differs by more than five percent (5%) from the Closing Date. If Inventory Value, the parties cannot agree on the Inventory Amount and the Inventory Adjustment Amount before the Closing Date, each of Annaco and Buyer will Base Price shall be (i) for a period of thirty (30) days following decreased, if the Inventory Value exceeds the Closing DateInventory Value, cooperate in good faith to mutually agree upon by the Inventory Amount and the Inventory Adjustment Amount and full amount of such excess, or (ii) increased, if the parties cannot reach an agreement during Closing Inventory Value exceeds the Inventory Value, by the full amount of such thirty excess. Any Base Price purchase price adjustment required under Section 3.3 shall be paid in cash to the appropriate recipient within ten (3010) day period, submit its determination Business Days after the amount of the Inventory Amount to a mutually agreed upon referee (the “Referee”) and the Referee shall make the final determination thereofpayment is determined. Such determination payment shall be made in accordance with the provisions hereof within 30 days after submission to the Referee; and the Referee’s determination shall be final, conclusive and binding on Annaco and Buyer. Buyer and Annaco agree to share equally the cost and expenses of the Referee, but each party shall bear its own legal and other expenses, if any. (d) If Annaco and Buyer do not agree upon the Inventory Amount on accompanied by interest from the Closing Date, Buyer will pay Sellers an amount Date calculated at Closing based on an estimated Inventory Adjustment Amount equal to $2,350,000 (which assumes an Inventory Amount equal to $4,500,000 x 0.9 = $4,050,000) (the “Estimated Inventory Adjustment Amount”). Following the determination of the Inventory Amount by the parties or the Referee, as the case may be, after Closing, payment of the difference between the actual Inventory Adjustment Amount and the Estimated Inventory Adjustment Amount paid at Closing shall be made by Buyer to Annaco or Annaco to Buyer by wire transfer within 15 days after the final determination of the Inventory Amount by the parties or the Referee, as the case may be5 percent per annum.