Common use of Preparation of the Closing Statement Clause in Contracts

Preparation of the Closing Statement. (i) As soon as practicable, but no later than sixty (60) days after the Closing Date, Purchaser shall prepare and deliver to Seller a statement (the “Proposed Closing Statement”) setting forth Purchaser’s calculation of the Inventory Value and the Net Accounts Receivable, in each case as of immediately prior to the Closing (respectively, the “Closing Inventory Value” and the “Closing Net Accounts Receivable”). The Parties agree that the Closing Inventory Value and Closing Net Accounts Receivable shall be calculated in a manner consistent with the calculation methodology used by the Parties in establishing the Reference Inventory Value and the Reference Net Accounts Receivable Target. (ii) If Seller disagrees with Purchaser’s calculation of the Closing Inventory Value and/or the Closing Net Accounts Receivable, Seller shall promptly, but in no event later than thirty (30) days after receiving the Proposed Closing Statement (the “Review Period”), deliver to Purchaser written notice describing in reasonable detail and with appropriate supporting documentation its calculation of the Inventory Value and/or the Net Accounts Receivable, as applicable, and its dispute by specifying those items or amounts as to which Seller disagrees, together with Seller’s determination of such disputed items and amounts (a “Dispute Notice”); provided that Seller shall be deemed to have agreed with all items and amounts that are not disputed in the Dispute Notice. If Seller fails to deliver a Dispute Notice within the Review Period, Seller and Purchaser agree that the Proposed Closing Statement shall be deemed to set forth the Final Inventory Value and the Final Net Accounts Receivable. If Seller delivers a Dispute Notice to Purchaser within the Review Period, Purchaser and Seller will use reasonable good faith efforts to resolve the dispute during the 30-day period commencing on the date Seller delivers the Dispute Notice to Purchaser. If Seller and Purchaser are not able to resolve all disputed items within such 30-day period, then the items remaining in dispute shall be submitted immediately to an independent nationally recognized firm with no existing or former business relationship with any Party hereto mutually agreeable to Seller and Purchaser (the “Accounting Firm”). The Accounting Firm shall be given reasonable access to all relevant records of Purchaser and Seller to calculate the Closing Inventory Value and/or the Closing Net Accounts Receivable, as applicable. If any remaining issues in dispute are submitted to the Accounting Firm for resolution, each of Seller and Purchaser will be afforded an opportunity to present to the Accounting Firm any material relating to the determination of the matters in dispute and to discuss such matters with the Accounting Firm. The Accounting Firm shall act as an expert and not as an arbitrator to calculate, based solely on the written submissions of Seller, on the one hand, and Purchaser, on the other, and not by independent investigation, the Inventory Value and/or the Net Accounts Receivable, as applicable, and shall be instructed that its calculation (A) with respect to the Inventory Value, must be made in accordance with the Inventory Valuation Method, (B) with respect to the Net Accounts Receivable, in a manner consistent with the calculation methodology used by the Parties in establishing the Reference Net Accounts Receivable Target, and (C) with respect to each item in dispute, must be within the range of values established for such amount as determined by reference to the value assigned to such amount by Seller in the Dispute Notice and by Purchaser in the Proposed Closing Statement. The Accounting Firm shall submit such calculation to Purchaser and Seller as soon as practicable, but in any event within thirty (30) days after the remaining issues in dispute are submitted to the Accounting Firm. The determination by the Accounting Firm of the Closing Inventory, as set forth in a written notice delivered to Seller and Purchaser by the Accounting Firm in accordance with this Agreement absent manifest error will be binding and conclusive on Seller and Purchaser. Closing Inventory Value as finally determined in accordance with this Section 3.3(a)(ii) is referred to herein as the “Final Inventory Value.” Closing Net Accounts Receivable as finally determined in accordance with this Section 3.3(a)(ii) is referred to herein as the “Final Net Accounts Receivable.” (iii) In the event Seller and Purchaser submit any unresolved objections to an Accounting Firm for resolution as provided in Section 3.3(a)(ii) above, the fees and expenses of such Accounting Firm will be shared equally between Seller and Purchaser. (iv) Purchaser shall make its financial records available to Seller and its accountants and other Representatives, and Seller shall make its financial records available to Purchaser and its accountants and other Representatives, in each case, at reasonable times during the period beginning on the Closing Date and ending on the date of the final determination of the Final Inventory Value and the Final Net Accounts Receivable pursuant to Section 3.3(a)(ii) above, subject to customary indemnification and other agreements that may be requested by Representatives of the Parties.