Net Asset Value Determination. (a) At the Closing, ▇▇▇▇▇ shall deliver to the Company the Preliminary Balance Sheet as of the Closing Date. The Preliminary Balance Sheet shall be prepared in a form consistent with the form attached hereto as Schedule 4.2 hereto and shall be subject to the Company’s review and approval (such approval not to be unreasonably withheld or delayed). The statement of the Preliminary Balance Sheet shall be prepared in accordance with the procedures set forth in Section 4.2(b). (b) Not later than the ninetieth (90th) day after the Closing, or the one hundred twentieth (120th) day after the Closing if the Company, in its sole discretion, decides to conduct an audit, (i) the Company shall prepare and deliver to ▇▇. ▇▇▇▇▇▇▇ a balance sheet of the Business (as defined in the Purchase Agreement) reflecting only the Acquired Assets and the Assumed Liabilities (the “Closing Date Balance Sheet”) as of 11:59 p.m., New York, New York time, on of the Closing Date and will provide a copy of such Closing Date Balance Sheet to ▇▇. ▇▇▇▇▇▇▇, who will submit his comments and proposed changes to the Company within ten (10) Business Days from the receipt of such Closing Date Balance Sheet and (ii) based on the Closing Date Balance Sheet, the Company shall prepare a statement of the Closing Date Net Asset Value of the Business as of 11:59 p.m., New York, New York time, on the Closing Date, in a form consistent with the form attached hereto as Schedule 4.2. The Closing Date Balance Sheet shall be prepared in accordance with this Section 4.2(b). In the event of a conflict or inconsistency between Section 4.2(b)(i), Section 4.2(b)(ii) and/or Section 4.2(b)(iii), the provisions of Section 4.2(b)(iii) shall take precedence over the provisions of Section 4.2(b)(ii) and Section 4.2(b)(i), and the provisions of Section 4.2(b)(ii) shall take precedence over the provisions of Section 4.2(b)(i). (i) The Closing Date Balance Sheet shall be determined in accordance with principles, practices and procedures which are consistent with those which were applied in the preparation of the Most Recent Financial Statements (as defined in the Purchase Agreement) with respect to the Acquired Assets and the Assumed Liabilities. (ii) Notwithstanding anything to the contrary in Section 4.2(b)(i), if any of the accounting principles, practices or procedures required by Section 4.2(b)(i) produces asset or liability values which are not in compliance with GAAP, the Closing Date Balance Sheet shall reflect an adjustment necessary to produce asset or liability values which are in compliance with GAAP. Furthermore, the provisions of this Section 4.2(b) shall operate independently from any specific line item as to which ▇▇▇▇▇ makes representations in Article IV of the Asset Purchase Agreement. (iii) Notwithstanding anything to the contrary in Section 4.2(b)(i) or Section 4.2(b)(ii), in determining the Closing Date Balance Sheet, (A) no value shall be given to any Excluded Assets or Excluded Liabilities, and (B) the value of the prepublication costs will be reduced by 25%. In preparing the Closing Date Balance Sheet, the Company shall be entitled to have access to the books and records of ▇▇▇▇▇ and the work papers of ▇▇▇▇▇ prepared in connection with the preparation of the Preliminary Balance Sheet and shall be entitled to discuss such books and records and work papers with ▇▇. ▇▇▇▇▇▇▇ and those persons responsible for the preparation thereof. In the event that in preparing the Closing Date Balance Sheet the Company conducts a physical inventory, ▇▇. ▇▇▇▇▇▇▇ shall be entitled to have one or more representatives present during the conduct of such physical inventory. (c) If ▇▇. ▇▇▇▇▇▇▇ does not agree with the Closing Date Net Asset Value as reflected on the Closing Date Balance Sheet, ▇▇. ▇▇▇▇▇▇▇ shall so inform the Company in writing within thirty (30) Business Days after his receipt thereof, such writing to set forth his objections in reasonable detail. If ▇▇. ▇▇▇▇▇▇▇ and the Company cannot reach agreement as to any disputed matter relating to the Closing Date Net Asset Value within thirty (30) Business Days after notification by ▇▇. ▇▇▇▇▇▇▇ to the Company of a dispute, they shall forthwith refer the disputed items to an accounting firm of recognized standing in the United States and mutually agreeable to ▇▇. ▇▇▇▇▇▇▇ and the Company for resolution applying GAAP and the principles set forth on Schedule 4.2, with the understanding that such firm shall resolve all disputed items within twenty (20) Business Days after such disputed items are referred to it. If the Company and ▇▇. ▇▇▇▇▇▇▇ are unable to agree on the choice of an accounting firm, then ____________ (“_____________”)1 shall serve as the accounting firm. If _____________ is unwilling to so serve, the Company and ▇▇. ▇▇▇▇▇▇▇ shall select an accounting firm of recognized standing in the United States by lot (after excluding their respective regular outside accounting firms). The determination of such accounting firm shall be made as an expert and not as an arbiter and shall be based solely on the written submissions by the Parties and their respective representatives, and the determination shall not be by independent review. Such accounting firm shall deliver a written report resolving only the disputed matters and setting forth the basis for such resolution within twenty (20) days after the Parties have submitted in writing (or have had the opportunity to submit in writing but have not submitted) their positions as to the disputed items. In preparing its report, such accounting firm shall not assign a value to any disputed amount other than one submitted by the Company, on the one hand, or ▇▇. ▇▇▇▇▇▇▇, on the other hand. The decision of any such accounting firm under this clause (b) with respect to all disputed matters relating to the Closing Date Net Asset Value shall be deemed final and conclusive and shall be binding upon ▇▇. ▇▇▇▇▇▇▇ and the Company. In addition, if ▇▇. ▇▇▇▇▇▇▇ does not object to the Closing Date Net Asset Value within the thirty (30) Business Day period referred to above, the Closing Date Net Asset Value as reflected on the Closing Date Balance Sheet as so prepared shall be deemed final and conclusive and binding upon ▇▇. ▇▇▇▇▇▇▇ and the Company. 1 To be selected by Buyer with ▇▇. ▇▇▇▇▇▇▇’▇ approval which shall not be unreasonably withheld. (d) Until such time as the Closing Date Balance Sheet and the statement of Closing Date Net Asset Value are deemed final, conclusive and binding on all Parties, ▇▇. ▇▇▇▇▇▇▇ shall be entitled to have reasonable access to the books and records of the Business and the work papers of the Company prepared specifically in connection with the Closing Date Balance Sheet and the statement of Closing Date Net Asset Value and, upon five (5) Business Days’ prior notice, shall be entitled to discuss such books and records and work papers with the Company and those persons responsible for the preparation thereof. (e) ▇▇. ▇▇▇▇▇▇▇ and the Company shall pay their own respective costs and expenses incurred in connection with the matters described in this Section 4.2, provided that the fees and expenses of the accounting firm selected to calculate the Closing Date Net Asset Value pursuant to Section 4.2(c) shall be borne entirely by the party whose assertions regarding the final Closing Date Net Asset Value differ by the greatest amount from the Closing Date Net Asset Value determined by such accounting firm.
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Net Asset Value Determination. (a) At the Closing, ▇▇▇▇▇ shall deliver to the Company the Preliminary Balance Sheet as of the Closing Date. The Preliminary Balance Sheet shall be prepared in a form consistent with the form attached hereto as Schedule 4.2 hereto and shall be subject to the Company’s review and approval (such approval not to be unreasonably withheld or delayed). The statement of the Preliminary Balance Sheet shall be prepared in accordance with the procedures set forth in Section 4.2(b).
(b) Not later than the ninetieth (90th) day after the Closing, or the one hundred twentieth (120th) day after the Closing if the Company, in its sole discretion, decides to conduct an audit, (i) the Company shall prepare and deliver to ▇▇. ▇▇▇▇▇▇▇ a balance sheet of the Business (as defined in the Purchase Agreement) reflecting only the Acquired Assets and the Assumed Liabilities (the “Closing Date Balance Sheet”) as of 11:59 p.m., New York, New York time, on of the Closing Date and will provide a copy of such Closing Date Balance Sheet to ▇▇. ▇▇▇▇▇▇▇, who will submit his comments and proposed changes to the Company within ten (10) Business Days from the receipt of such Closing Date Balance Sheet and (ii) based on the Closing Date Balance Sheet, the Company shall prepare a statement of the Closing Date Net Asset Value of the Business as of 11:59 p.m., New York, New York time, on the Closing Date, in a form consistent with the form attached hereto as Schedule 4.2. The Closing Date Balance Sheet shall be prepared in accordance with this Section 4.2(b). In the event of a conflict or inconsistency between Section 4.2(b)(i), Section 4.2(b)(ii) and/or Section 4.2(b)(iii), the provisions of Section 4.2(b)(iii) shall take precedence over the provisions of Section 4.2(b)(ii) and Section 4.2(b)(i), and the provisions of Section 4.2(b)(ii) shall take precedence over the provisions of Section 4.2(b)(i).
(i) The Closing Date Balance Sheet shall be determined in accordance with principles, practices and procedures which are consistent with those which were applied in the preparation of the Most Recent Financial Statements (as defined financial statements contained in Trudy’s annual report for the Purchase Agreement) fiscal year ended March 31, 2009 with respect to the Acquired Assets and the Assumed Liabilities.
(ii) Notwithstanding anything to the contrary in Section 4.2(b)(i), if any of the accounting principles, practices or procedures required by Section 4.2(b)(i) produces asset or liability values which are not in compliance with GAAP, the Closing Date Balance Sheet shall reflect an adjustment necessary to produce asset or liability values which are in compliance with GAAP. Furthermore, the provisions of this Section 4.2(b) shall operate independently from any specific line item as to which ▇▇▇▇▇ makes representations in Article IV of the Asset Purchase Agreement.
(iii) Notwithstanding anything to the contrary in Section 4.2(b)(i) or Section 4.2(b)(ii), in determining the Closing Date Balance Sheet, (A) no value shall be given to any Excluded Assets or Excluded Liabilities, and (B) the value of the prepublication costs will be reduced by 25%. In preparing the Closing Date Balance Sheet, the Company shall be entitled to have access to the books and records of ▇▇▇▇▇ and the work papers of ▇▇▇▇▇ prepared in connection with the preparation of the Preliminary Balance Sheet and shall be entitled to discuss such books and records and work papers with ▇▇. ▇▇▇▇▇▇▇ and those persons responsible for the preparation thereof. In the event that in preparing the Closing Date Balance Sheet the Company conducts a physical inventory, ▇▇. ▇▇▇▇▇▇▇ shall be entitled to have one or more representatives present during the conduct of such physical inventory.
(c) If ▇▇. ▇▇▇▇▇▇▇ does not agree with the Closing Date Net Asset Value as reflected on the Closing Date Balance Sheet, ▇▇. ▇▇▇▇▇▇▇ shall so inform the Company in writing within thirty (30) Business Days after his receipt thereof, such writing to set forth his objections in reasonable detail. If ▇▇. ▇▇▇▇▇▇▇ and the Company cannot reach agreement as to any disputed matter relating to the Closing Date Net Asset Value within thirty (30) Business Days after notification by ▇▇. ▇▇▇▇▇▇▇ to the Company of a dispute, they shall forthwith refer the disputed items to an accounting firm of recognized standing in the United States and mutually agreeable to ▇▇. ▇▇▇▇▇▇▇ and the Company for resolution applying GAAP and the principles set forth on Schedule 4.2, with the understanding that such firm shall resolve all disputed items within twenty (20) Business Days after such disputed items are referred to it. If the Company and ▇▇. ▇▇▇▇▇▇▇ are unable to agree on the choice of an accounting firm, then ____________ (“_____________”)1 31 shall serve as the accounting firm. If _____________ is unwilling to so serve, the Company and ▇▇. ▇▇▇▇▇▇▇ shall select an accounting firm of recognized standing in the United States by lot (after excluding their respective regular outside accounting firms). The determination of such accounting firm shall be made as an expert and not as an arbiter and shall be based solely on the written submissions by the Parties and their respective representatives, and the determination shall not be by independent review. Such accounting firm shall deliver a written report resolving only the disputed matters and setting forth the basis for such resolution within twenty (20) days after the Parties have submitted in writing (or have had the opportunity to submit in writing but have not submitted) their positions as to the disputed items. In preparing its report, such accounting firm shall not assign a value to any disputed amount other than one submitted by the Company, on the one hand, or ▇▇. ▇▇▇▇▇▇▇, on the other hand. The decision of any such accounting firm under this clause (b) with respect to all disputed matters relating to the Closing Date Net Asset Value shall be deemed final and conclusive and shall be binding upon ▇▇. ▇▇▇▇▇▇▇ and the Company. In addition, if ▇▇. ▇▇▇▇▇▇▇ does not object to the Closing Date Net Asset Value within the thirty (30) Business Day period referred to above, the Closing Date Net Asset Value as reflected on the Closing Date Balance Sheet as so prepared shall be deemed final and conclusive and binding upon ▇▇. ▇▇▇▇▇▇▇ and the Company.
1 To be selected by Buyer with ▇▇. ▇▇▇▇▇▇▇’▇ approval which shall not be unreasonably withheld.
(d) Until such time as the Closing Date Balance Sheet and the statement of Closing Date Net Asset Value are deemed final, conclusive and binding on all Parties, ▇▇. ▇▇▇▇▇▇▇ shall be entitled to have reasonable access to the books and records of the Business and the work papers of the Company prepared specifically in connection with the Closing Date Balance Sheet and the statement of Closing Date Net Asset Value and, upon five (5) Business Days’ prior notice, shall be entitled to discuss such books and records and work papers with the Company and those persons responsible for the preparation thereof.
(e) ▇▇. ▇▇▇▇▇▇▇ and the Company shall pay their own respective costs and expenses incurred in connection with the matters described in this Section 4.2, provided that the fees and expenses of the accounting firm selected to calculate the Closing Date Net Asset Value pursuant to Section 4.2(c) shall be borne entirely by the party whose assertions regarding the final Closing Date Net Asset Value differ by the greatest amount from the Closing Date Net Asset Value determined by such accounting firm.
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