IN THE PACKAGE FOR WHICH IT DISPUTES LIABILITY.
ANY ITEM WHICH HAS NOT
BEEN DISPUTED BY BUYER SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN PURCHASED IN
ACCORDANCE WITH THE MANUFACTURING SERVICES AGREEMENT, AND BUYER SHALL BE
REQUIRED TO PAY FOR SUCH ITEMS.
THE PARTIES SHALL USE THEIR RESPECTIVE BEST
EFFORTS TO RESOLVE ANY DISPUTE ON OR BEFORE THE CLOSING.
IN THE EVENT EITHER
PARTY BELIEVES THE DISPUTE TO BE MATERIAL, IT SHALL HAVE THE RIGHT TO POSTPONE
CLOSING UNTIL THE DISPUTE IS RESOLVED.
(B)
COMMENCING ON APRIL 5, 2008, SELLERS SHALL PROVIDE BUYER WITH
PERIODIC INVENTORY LISTINGS, TOGETHER WITH A GOOD FAITH ESTIMATED INVENTORY
VALUE.
THE PURPOSE IS SO THAT BUYER CAN BECOME COMFORTABLE WITH SELLERS'S
FORMAT AND CONTENTS OF THE INVENTORY LISTING.
BUYER SHALL REVIEW THE INVENTORY
LISTING, AND ADVISE SELLERS IN THE EVENT IT QUESTIONS THE CALCULATIONS SET FORTH
THEREIN.
ON OR BEFORE MAY 15, 2008, BUYER SHALL ADVISE SELLERS WHETHER IT HAS
ANY MATERIAL CONCERNS AS TO ANY INVENTORY LISTING AND/OR ESTIMATED INVENTORY
VALUE.
THE PARTIES ACKNOWLEDGE THAT THE CONTENTS OF THESE ITEMS WILL VARY
WEEKLY AS INVENTORY IS PROCURED AND PRODUCT IS SHIPPED.
HOWEVER, BUYER SHALL BE
REQUIRED TO REVIEW THESE DOCUMENTS AND ADVISE SELLERS OF ANY MATERIAL ISSUES.
(C)
NOT LATER THAN TEN DAYS PRIOR TO THE CLOSING DATE, THE SELLERS
SHALL PREPARE AN INVENTORY LISTING, TOGETHER WITH A GOOD FAITH ESTIMATED
INVENTORY VALUE AS OF THE DATE ON
3
WHICH IT IS PREPARED, WHICH SHALL PROVIDE SUFFICIENT DETAIL AS IS REASONABLY
NECESSARY TO CONFIRM THE CALCULATIONS THEREIN (THE "PRELIMINARY CLOSING
INVENTORY LISTING").
AMONG OTHER THINGS, THE PRELIMINARY CLOSING INVENTORY
LISTING SHALL TAKE INTO CONSIDERATION ANY COMMENTS OR ADJUSTMENTS IDENTIFIED BY
BUYER TO SELLERS RESULTING FROM BUYER'S DUE DILIGENCE REVIEW OF THE INVENTORY
AND SELLERS'S INVENTORY RECORDS AS WELL AS BUYER'S REVIEW OF THE PREVIOUS
INVENTORY LISTINGS. IN ORDER TO PREPARE THE INVENTORY LISTING SELLERS SHALL HAVE
TAKEN INTO CONSIDERATION THE FACT THAT INVENTORY MEANS ALL THE MATERIALS
PRIMARILY USED OR HELD FOR USE BY SELLERS'S MONTERREY BUSINESS CONSISTENT WITH
PAST PRACTICE, EXCEPTING THOSE CREATED BY SELLERS'S FAILURE TO EXECUTE ITS
RESPONSIBILITIES AND INCLUDING LIABILITIES FOR VMI, OPEN PURCHASE ORDERS AND
OTHER SIMILAR ITEMS, AS NEEDED TO SUPPORT THE ADEQUATE ONGOING OPERATIONS OF THE
ACQUIRED BUSINESS.
(D)
IMMEDIATELY PRIOR TO THE CLOSING, BUYER SHALL COMPLETE A PHYSICAL
INVENTORY REVIEW OF THE INVENTORY TO ITS REASONABLE SATISFACTION (THE "BUYER'S
PHYSICAL INVENTORY REVIEW"), AND SHALL UPDATE THE PRELIMINARY CLOSING INVENTORY
LISTING (THE "UPDATED INVENTORY LISTING") AND PREPARE A CALCULATION OF THE
INVENTORY VALUE TO REFLECT THE RESULTS OF THE BUYER'S PHYSICAL INVENTORY
REVIEW.
BUYER SHALL PROVIDE A COPY OF THE UPDATED INVENTORY LISTING TO
SELLERS.
BUYER ACKNOWLEDGES THAT THE QUANTITIES OF INVENTORY SET FORTH IN THE
PRELIMINARY CLOSING INVENTORY LIST WILL DIFFER FROM THE QUANTITIES OF INVENTORY
COUNTED DURING BUYER'S PHYSICAL INVENTORY REVIEW (E.G., BECAUSE OF RECEIPTS AND
SHIPMENTS).
BUYER SHALL HAVE THE OBLIGATION TO PURCHASE ALL INVENTORY AT THE
FACILITY OTHER THAN (I) INVENTORY WHICH IS DAMAGED OR OTHERWISE NOT OF SALEABLE
QUALITY OR (II)