Inventory Valuation. (a) On or prior to the Closing Date, Seller and Buyer shall jointly conduct a physical count of the Inventory as of the Closing Date located in the Ohio Distribution Warehouse and located in Montreal, Canada and intended for the United States market (the "United States Inventory"), and Buyer shall make or cause to be made a calculation of the United States Inventory value as of the Closing Date in accordance with Seller's accounting policies (as referred to in the last sentence of Section 5.11) and including 2002 Standard Manufacturing Costs Per Unit, as set forth in the Montreal Section of Exhibit 2.3(a) to the Manufacturing Agreement, Montreal or Ohio Distribution Warehouse (as the case may be), plus freight-in (the "Calculation"). Any United States Inventory that exceeds a twelve (12) month supply per List Number (as measured on the basis of sales for the six-month period preceding the Closing Date), to the extent of such excess, or any United States Inventory that is not of a good and merchantable quality shall not be included in the Calculation. For purposes of the Calculation, all United States Inventory that has a shelf-life expiration date of less than (i) thirteen and one-half (13.5) months from the Closing Date with respect to Product List Numbers 6165 and 6603 (as described on Exhibit A attached hereto) and (ii) eighteen (18) months from the Closing Date with respect to all other Products shall be excluded from the Calculation; provided, however, that Seller shall have the right to donate such excluded United States Inventory to charitable organizations. With respect to any Inventory donated by Seller to charitable organizations pursuant to this Section 3.5(a), Seller shall notify Buyer of the name and location of such charitable organization promptly after such donation is made. Buyer shall provide Seller with copies of the Calculation and all work papers associated therewith within fifteen (15) days after the Closing Date. Buyer may not assert a claim for indemnification with respect to any United States Inventory that is not included in the Calculation. (b) Seller shall have a period of thirty (30) days in which to review the Calculation and the work papers associated therewith provided by Buyer. If Seller disagrees with all or any part of the Calculation, Seller shall have the right to notify Buyer in writing of such disagreement and the reasons for so disagreeing, in which case Seller and Buyer shall attempt to resolve the disagreement. If within fifteen (15) days after receipt of such notice by Seller, Seller and Buyer are unable to resolve the differences, if any, arising as a result of the Calculation, the Parties or either of them shall submit a statement of all unresolved differences with copies of the Calculation to such independent accounting firm as shall be mutually agreed upon by the Parties (the "Accountants") for a binding and nonappealable determination to be rendered within thirty (30) days after such submission. All fees and expenses of the Accountants incurred in this capacity shall be billed to and shared by Seller and Buyer equally.
Appears in 1 contract
Inventory Valuation. (a) On or Not less than two (2) Business Days prior to the Closing Date, Seller and GFI shall deliver to Buyer shall jointly conduct a physical count its reasonable, good faith estimate of the Inventory as of Value, based on GFI's historical standard costing method subject to the Closing Date located pricing schedule set forth in the Ohio Distribution Warehouse and located in Montreal, Canada and intended for the United States market Schedule 1.1(a) (the "United States InventoryEstimated Inventory Value"), and Buyer shall make or cause to be made a calculation of the United States Inventory value as of the Closing Date in accordance with Seller's accounting policies (as referred to in the last sentence of Section 5.11) and including 2002 Standard Manufacturing Costs Per Unit, as set forth in the Montreal Section of Exhibit 2.3(a) to the Manufacturing Agreement, Montreal or Ohio Distribution Warehouse (as the case may be), plus freight-in (the "Calculation"). Any United States Inventory that exceeds a twelve (12) month supply per List Number (as measured on the basis of sales for the six-month period preceding the Closing Date), to the extent of such excess, or any United States Inventory that is not of a good and merchantable quality shall not be included in the Calculation. For purposes of the Calculation, all United States Inventory that has a shelf-life expiration date of less than (i) thirteen and one-half (13.5) months from the Closing Date with respect to Product List Numbers 6165 and 6603 (as described on Exhibit A attached hereto) and (ii) eighteen (18) months from the Closing Date with respect to all other Products shall be excluded from the Calculation; provided, however, that Seller shall have the right to donate such excluded United States Inventory to charitable organizations. With respect to any Inventory donated by Seller to charitable organizations pursuant to this Section 3.5(a), Seller shall notify Buyer of the name and location of such charitable organization promptly after such donation is made. Buyer shall provide Seller with copies of the Calculation and all work papers associated therewith within fifteen (15) days after the Closing Date. Buyer may not assert a claim for indemnification with respect to any United States Inventory that is not included in the Calculation.
(b) Seller As soon as practicable following the Closing Date, GFI shall have a period deliver to Buyer its calculation of the Inventory Value as of the Closing Date, based on the joint physical inventory described in Section 3.1 (the "GFI Inventory Calculation"). In connection with the preparation of the GFI Inventory Calculation, Buyer shall grant GFI's accountants and other representatives reasonable access to all of the books and records of the Business.
(c) Within thirty (30) days in which after receipt of the GFI Inventory Calculation, Buyer may, by written notice to review GFI, object to the Calculation and the work papers associated therewith provided by BuyerGFI Inventory Calculation. If Seller disagrees with all or any part of Buyer objects in good faith to the GFI Inventory Calculation, Seller Buyer shall have within such thirty (30) day period deliver written notice of its objection (the right "Objection Notice") to notify Buyer GFI: (i) objecting in writing of such disagreement good faith to the GFI Inventory Calculation, (ii) setting forth the items being disputed and the reasons for so disagreeingtherefor, in which case Seller and (iii) specifying Buyer's calculation of the Inventory Value.
(d) For thirty (30) days after delivery of the Objection Notice, GFI and Buyer shall attempt to resolve all disputes between them regarding the disagreementInventory Value. If within fifteen (15) days after receipt of such notice by Seller, Seller GFI and Buyer are unable to cannot resolve the differences, if any, arising as a result of the Calculationall such disputes within such thirty (30) day period, the Parties or either of them matters in dispute shall submit be determined by a statement of all unresolved differences with copies of the Calculation to such nationally recognized independent public accounting firm as shall be mutually agreed upon by the Parties satisfactory to GFI and Buyer (the "AccountantsArbiter") for a binding and nonappealable determination to be rendered within ). Promptly, but not later than thirty (30) days after the acceptance of its appointment, the Arbiter shall determine (based solely on presentations by Buyer and GFI to the Arbiter and not by independent review) only those items in dispute and shall render a report as to its resolution of such submissionitems and the resulting calculation of the Inventory Value. All For purposes of calculating the Inventory Value, the amounts to be included shall be the appropriate amounts from the GFI Inventory Calculation as to items that are not in dispute, and the amounts determined by the Arbiter, as to items that are submitted for resolution by the Arbiter. In resolving any disputed item, the Arbiter may not assign a value to such item greater than the greatest value for such item claimed by either party in the GFI Inventory Calculation or Objection Notice or less than the lowest value for such item claimed by either party in the GFI Inventory Calculation or Objection Notice. GFI and Buyer shall cooperate with the Arbiter in making its determination and such determination shall be conclusive and binding upon GFI and Buyer. GFI and Buyer shall each bear one-half of the fees and expenses of the Accountants incurred in Arbiter. The value of the Inventory as finally determined pursuant to this capacity Section 3.2 shall be billed deemed to and shared by Seller and Buyer equallybe the "Inventory Value".
Appears in 1 contract