Common use of Inventory Adjustments Clause in Contracts

Inventory Adjustments. The purchase price of the Premier Inventory will be reduced, on a dollar for dollar basis, if and to the extent that, the value of Premier Inventory is less than $625,000. Such value shall be based upon a physical inventory conducted by representatives of Premier and OIS jointly, as soon as possible, after execution of this Agreement and will identify quantities and types of materials on hand. The value of the Premier Inventory, other than finished goods, shall then be determined by the application of historical or current cost, whichever is lower, of the raw materials or material components of work in process so identified. The value of any finished goods shall be based on the contract price for those products under the Manufacturing Agreement. Any purchases of raw materials, work in progress or finished goods from Premier Inventory by OIS before the Closing shall similarly cause a reduction in the value of Premier Inventory by the amount of the purchase.