Common use of Post-Closing Purchase Price Adjustments Clause in Contracts

Post-Closing Purchase Price Adjustments. The Seller and the Buyer agree that the Estimated Closing Date Basic Purchase Price shall be adjusted following the Closing as follows: (a) Within 60 days after the Closing Date, the Buyer shall prepare and deliver to the Seller (i) a statement (the “Closing Statement”) setting forth the Adjusted Inventory Amount, the amount of Prepaid Assets, the amount of the Assumed Accounts Payable, the Accrued Vacation Liability Amount, the Additional Royalty Payment Amount and the Accrued Expenses amount, in each case as of the Closing Date and (ii) the Buyer’s calculation of (a) the Asset-Liability Ratio Amount, (b) the Markdown Pool Amount and (c) the Final Basic Purchase Price. The Prepaid Asset Amount, the amount of Assumed Accounts Payable shall be determined in accordance with GAAP applied on a consistent basis with the accounting principles used in the preparation of the Balance Sheet. The Accrued Expenses amount shall be determined in accordance with GAAP and reflect the amounts due and outstanding as of the Closing Date for the respective categories included in Schedule 1.1 notwithstanding the Seller’s historical accounting practices therefor. The Adjusted Inventory Amount shall be determined using the agreed-upon valuation assumptions set forth in Schedule 3.4(a) applied to the FIFO (meaning “first-in-first-out”) cost of the Conveyed Inventory, determined in accordance with GAAP. The delivery of the Closing Statement shall be accompanied by all information reasonably necessary to determine the Asset-Liability Ratio, the Asset-Liability Ratio Amount, the Adjusted Inventory Amount, the Prepaid Asset amount, the Accrued Vacation Liability amount, the Accrued Expenses amount and the amount of Assumed Accounts Payable, the Additional Royalty Payment Amount and the Markdown Pool Amount (including detailed schedules of Current Inventory, Medium Term Inventory, BSRs, Transition Inventory, Scheduled 4/25 Inventory, Scheduled 5/25 Inventory, Purchase Order Scheduled 5/25 Inventory, Purchase Order Scheduled 4/25 Inventory, Prepaid Assets, Accrued Vacation Liability, Accrued Expenses and lists of Assumed Accounts Payable in each case at the Closing Date). The Seller shall cooperate with the Buyer in the preparation of the Closing Statement. Simultaneously with the delivery of the Closing Statement, the Buyer shall notify the Seller in writing of the amount, if any, that the Buyer believes is payable pursuant to Section 3.4(d) below. (b) The Buyer, upon prior notice by the Seller, shall allow the Seller and its agents access at all reasonable times after the Closing Date to the applicable books, records and accounts of the Business reasonably related to the preparation of the Closing Statement to allow the Seller to examine the accuracy of the Closing Statement. Within 30 days after the date that the Closing Statement is delivered by the Buyer to the Seller, the Seller shall complete its examination thereof and may deliver to the Buyer a written report setting forth in reasonable detail any proposed adjustments to the Closing Statement, which may include claims that items included in the Current Inventory, Medium Term Inventory, BSRs, Transition Inventory, Scheduled 4/25 Inventory, Scheduled 5/25 Inventory, Purchase Order Scheduled 5/25 Inventory, Purchase Order Scheduled 4/25 Inventory, Prepaid Assets, Accrued Vacation Liability, Accrued Expenses or Assumed Accounts Payable are not properly included (the “Dispute Report”). If the Seller notifies the Buyer of its acceptance of the Adjusted Inventory Amount, Prepaid Asset amount, Accrued Vacation Liability amount, the amount of Accrued Expenses and the amount of Assumed Accounts Payable amount, the Markdown Pool Amount, the Additional Royalty Payment Amount or the Final Basic Purchase Price set forth on the Closing Statement, or if the Seller fails to deliver the Dispute Report within the 30-day period specified in the preceding sentence, the amounts set forth in the Closing Statement shall be final, conclusive and binding on the parties as of the last day of such 30-day period. (c) If the Seller timely delivers the Dispute Report, the Buyer and the Seller shall use good faith efforts to resolve any dispute involving the Adjusted Inventory Amount, the Prepaid Asset Amount, Accrued Vacation Liability, Assumed Accounts Payable Amount, the Additional Royalty Payment Amount, the Markdown Pool Amount and/or the Final Basic Purchase Price (each, a “Disputed Matter”), and any resolution between them as to a Disputed Matter shall be final, binding and conclusive on the parties hereto and shall be evidenced by a written agreement to that effect. However, if, after 30 days following the receipt by the Buyer of the Dispute Report, the Seller and the Buyer are unable to resolve any Disputed Matter, such Disputed Matter shall be referred to PricewaterhouseCoopers, LLP (“PWC”), or if PWC is unable or unwilling to serve in such capacity, an independent nationally recognized accounting firm mutually selected by Buyer and Seller (the “Arbitrator”). Each of the Seller and the Buyer may submit such written evidence and supporting documentation as they deem appropriate to the Arbitrator. The Arbitrator shall not hold any hearings or accept oral testimony. The scope of the disputes to be resolved by the Arbitrator shall be limited to the items in dispute that were timely and properly included in Dispute Report and the Arbitrator is not to make any other determination. The Arbitrator in making its determination shall not assign a value greater than the greatest value for such item claim by either party or a smaller than the smallest value for such item claimed by either party. The Arbitrator shall be instructed to use every reasonable effort to make its determination with respect to such Disputed Matter (the “Determination”) within 30 days of the submission to it of such Disputed Matter. The Buyer and the Seller shall give the Arbitrator access at all reasonable times to the books, records and accounts of the Business used to prepare the Closing Date Balance Sheet. After completing the Determination, the Arbitrator shall deliver notice of the Determination to the Buyer and the Seller and upon receipt thereof, the Determination shall be final, binding and conclusive on the parties hereto with respect to such Disputed Matter. Judgment may be entered upon the determination of the Arbitrator in any court having jurisdiction over the party against which such determination is to be enforced. (d) An adjustment to the Estimated Closing Date Basic Purchase Price shall be calculated as follows: (i) If the Estimated Closing Date Basic Purchase Price exceeds the Final Basic Purchase Price as determined pursuant to Section 3.4, then the Seller shall pay over to the Buyer in cash the amount of such excess. (ii) If the Final Basic Purchase Price as determined pursuant to Section 3.4 exceeds the Estimated Closing Date Basic Purchase Price then the Buyer shall pay over to the Seller in cash the amount of such excess. (iii) The payment due to Buyer or Seller, as the case may be, under clauses (i) or (ii) of this Section 3.4(d) shall be paid, together with interest thereon, at the rate of 8% per annum from, and including, the Closing Date to, but excluding, the date of payment, shall be made by wire transfer of immediately available funds within five (5) business days after the date on which the Closing Statement, the Asset-Liability Ratio, the Markdown Pool Amount and the Additional Royalty Payment are finally determined in accordance with this Section 3.4.

Post-Closing Purchase Price Adjustments. The Seller and the Buyer agree that the Estimated Closing Date Basic Purchase Price shall be adjusted (i) No later than one hundred eighty (180) days following the Closing as follows: (a) Within 60 days after the Closing Date, the Buyer Purchaser shall prepare and deliver to the Seller (i) a written statement (the “Purchaser Closing Statement”) setting forth the Adjusted Inventory Amount, the amount of Prepaid Assets, the amount (i) a consolidated balance sheet of the Assumed Accounts Payable, the Accrued Vacation Liability Amount, the Additional Royalty Payment Amount and the Accrued Expenses amount, in each case Companies as of the Closing Date and (the “Actual Closing Date Balance Sheet”), (ii) Purchaser’s written calculations of the BuyerClosing Working Capital as set forth in the Actual Closing Date Balance Sheet (the “Actual Working Capital”), (iii) Purchaser’s written calculation of the Closing Debt (a“Actual Debt”), (iv) Purchaser’s written calculation of the Company Transaction Expenses (“Actual Company Transaction Expenses”), (v) Purchaser’s written calculation of the Redemption Payments (the “Actual Redemption Payments”), (vi) Purchaser’s written calculation of the Related Party Transaction Payments (the “Actual Related Party Transaction Payments”), (vii) Purchaser’s written calculation of the Restricted Distributions (the “Actual Restricted Distributions”), and (viii) the Asset-Liability Ratio Amount, (b) the Markdown Pool Amount and (c) the Final Basic Purchase Price. The Prepaid Asset Amount, the amount of Assumed Accounts Payable shall be determined in accordance with GAAP applied on a consistent basis with the accounting principles used in the preparation of the Balance Sheet. The Accrued Expenses amount shall be determined in accordance with GAAP and reflect the amounts due and outstanding as resulting calculation of the Closing Date for Cash Payment (the respective categories included “Actual Closing Date Cash Payment”) calculated in Schedule 1.1 notwithstanding accordance with Section 1.02‎, together with a worksheet showing the Seller’s historical accounting practices therefordifference, if any, between any Estimated Closing Item ‎and the corresponding Actual Closing Item (as hereinafter defined). The Adjusted Inventory Amount Actual Closing Date ‎Balance Sheet, the Actual Working Capital, the Actual Debt, the Actual Company Transaction ‎Expenses, the Actual Redemption Payments, the Actual Related Party Transaction Payments, the ‎Actual Restricted Distributions, and the resulting calculation of Actual Closing Date Cash ‎Payment (collectively, the “Actual Closing Items”) shall be determined using prepared and calculated in accordance with the agreed-upon valuation assumptions illustrative example and principles set forth in Schedule 3.4(a) applied on Exhibit A-1, and to the FIFO (meaning “first-in-first-out”) cost of the Conveyed Inventoryextent not addressed in Exhibit A-1, determined in accordance with GAAP. The delivery Notwithstanding anything to the contrary contained herein, any Account Receivable ‎included in the calculation of the Estimated Closing Date Cash Payment that is not ‎collected within one hundred eighty (180) days after the Closing Date shall, for purposes of this ‎calculation, be treated as “uncollectible” and shall be excluded from the determination of ‎Actual Working Capital and Final Working Capital (to the extent a Purchase Price Deficit, as finally determined in accordance with the remaining provisions of this Section 1.04, exists as a result of the exclusion of such Accounts Receivable from the determination of Final Working Capital, such Accounts Receivable shall, to the extent of such Purchase Price Deficit, be referred to herein as an “Uncollected Accounts Receivable”). Purchaser shall attempt to collect the Uncollected Accounts ‎Receivable on behalf of Seller after the Closing Date, subject to the right of the Seller‎ to participate with Purchaser in its efforts to collect the ‎Uncollected Accounts Receivable, with the Parties agreeing that Purchaser shall not settle or forgive any such Uncollected Accounts Receivable without the Seller’s prior written consent. The Parties agree that any such collection efforts with respect to the Uncollected Accounts Receivable shall be ‎undertaken in a manner that is consistent with the past collection practices of the Companies. Purchaser shall pay Seller ‎all proceeds received with respect to the Uncollected ‎Accounts Receivable, such proceeds to be remitted to Seller to Seller on a monthly ‎basis (within 10 days of the end of the month that such amounts were collected) together with an accounting thereof; provided, however, that for the avoidance of doubt, in no event shall Purchaser be obligated to remit any proceeds that are, in the aggregate with all such remittances, greater than the Purchase Price Deficit. ​ ​ (ii) No later than forty-five (45) days following the delivery by Purchaser of the Purchaser Closing Statement, Seller shall notify Purchaser in writing whether it accepts or disputes the accuracy of any items reflected thereon. (the “Actual Closing Items”). During such forty-five (45) day period, subject to Seller’s entry into a customary non-disclosure agreement reasonably satisfactory to Purchaser, Seller and his agents shall be provided with reasonable access during normal business hours to the financial books and records of the Companies, and, if necessary, Purchaser, the personnel of, and work papers prepared by, Purchaser and/or Purchaser’s accountants, as they may reasonably request to enable them to evaluate the Actual Closing Items or the Purchaser Closing Statement; provided, however, that Seller and his agents will conduct such review in a manner that does not unreasonably interfere with the conduct of the businesses of any of Purchaser, the Companies or their respective Affiliates. If Seller accepts the Actual Closing Items set forth in the Purchaser Closing Statement, then the calculations of Actual Working Capital, Actual Debt, Actual Company Transaction Expenses, Actual Redemption Payments, Actual Related Party Transaction Payments, Actual Restricted Distributions, and Actual Closing Date Cash Payment set forth in the Purchaser Closing Statement shall be accompanied by deemed final, conclusive and binding upon all information reasonably necessary to determine the Asset-Liability Ratio, the Asset-Liability Ratio Amount, the Adjusted Inventory Amount, the Prepaid Asset amount, the Accrued Vacation Liability amount, the Accrued Expenses amount and the amount Parties for all purposes of Assumed Accounts Payable, the Additional Royalty Payment Amount and the Markdown Pool Amount (including detailed schedules of Current Inventory, Medium Term Inventory, BSRs, Transition Inventory, Scheduled 4/25 Inventory, Scheduled 5/25 Inventory, Purchase Order Scheduled 5/25 Inventory, Purchase Order Scheduled 4/25 Inventory, Prepaid Assets, Accrued Vacation Liability, Accrued Expenses and lists of Assumed Accounts Payable in each case at the Closing Date)this Agreement. The Seller shall cooperate with the Buyer in the preparation of the Closing Statement. Simultaneously with the delivery of the Closing Statement, the Buyer shall notify the Seller in writing of the amount, if any, that the Buyer believes is payable pursuant to Section 3.4(d) below. (b) The Buyer, upon prior notice by the Seller, shall allow the Seller and its agents access at all reasonable times after the Closing Date to the applicable books, records and accounts of the Business reasonably related to the preparation of the Closing Statement to allow the Seller to examine the accuracy of the Closing Statement. Within 30 days after the date that the Closing Statement is delivered by the Buyer to the Seller, the Seller shall complete its examination thereof and may deliver to the Buyer a written report setting forth in reasonable detail any proposed adjustments to the Closing Statement, which may include claims that items included in the Current Inventory, Medium Term Inventory, BSRs, Transition Inventory, Scheduled 4/25 Inventory, Scheduled 5/25 Inventory, Purchase Order Scheduled 5/25 Inventory, Purchase Order Scheduled 4/25 Inventory, Prepaid Assets, Accrued Vacation Liability, Accrued Expenses or Assumed Accounts Payable are not properly included (the “Dispute Report”). If the Seller notifies the Buyer of its acceptance of the Adjusted Inventory Amount, Prepaid Asset amount, Accrued Vacation Liability amount, the amount of Accrued Expenses and the amount of Assumed Accounts Payable amount, the Markdown Pool Amount, the Additional Royalty Payment Amount or the Final Basic Purchase Price set forth on the Closing Statement, or if the Seller fails to deliver the Dispute Report within the 30-day period specified in the preceding sentence, the amounts Any matters set forth in the Purchaser Closing Statement shall that are not included in a timely delivered Dispute Notice (as defined below) will be deemed accepted by Seller and Purchaser’s determination of such matters will be final, conclusive and binding on upon the parties as Parties for all purposes of the last day of such 30-day periodthis Agreement. (ciii) If Seller disputes the accuracy of any of the Actual Closing Items set forth in the Purchaser Closing Statement, Seller shall provide written notice (the “Dispute Notice”) to Purchaser no later than forty-five (45) days following the delivery by Purchaser to Seller of the Purchaser Closing Statement, setting forth in reasonable detail those Actual Closing Items that Seller disputes, the amounts of any adjustments that are necessary in Seller’s judgment for the computations of the disputed Actual Closing Items to conform to the requirements of this Agreement, and the basis for Seller’s suggested adjustments (such items or matters raised in such Dispute Notice, the “Disputed Items”). During the forty-five (45) day period following delivery of a Dispute Notice, (A) Purchaser and Seller shall meet and negotiate in good faith with a view to resolving the Disputed Items, and (B) Seller and his agents shall continue to be provided with reasonable access during normal business hours to the financial books and records of the Companies, Purchaser, the personnel of, and work papers prepared by, Purchaser and/or Purchaser’s accountants, as they may reasonably request to enable them to further evaluate the Actual Closing Items or the Purchaser Closing Statement. If the Parties resolve all of the Disputed Items in accordance with the foregoing procedure, the amounts agreed upon by them shall be deemed final, conclusive and binding upon the Parties for all purposes of this Agreement. (iv) If the Seller timely delivers Parties fail to resolve all of the Dispute ReportDisputed Items within such forty-five (45) period, the Buyer and the then Purchaser and/or Seller shall use good faith efforts to resolve any dispute involving the Adjusted Inventory Amountrequest that ▇▇▇▇▇ ▇▇▇▇▇ US LLP or, the Prepaid Asset Amount, Accrued Vacation Liability, Assumed Accounts Payable Amount, the Additional Royalty Payment Amount, the Markdown Pool Amount and/or the Final Basic Purchase Price (each, a “Disputed Matter”), and any resolution between them as to a Disputed Matter shall be final, binding and conclusive on the parties hereto and shall be evidenced by a written agreement to that effect. However, if, after 30 days following the receipt by the Buyer of the Dispute Report, the Seller and the Buyer are if ▇▇▇▇▇ ▇▇▇▇▇ US LLP is unable to resolve any Disputed Matterserve, such Disputed Matter shall be referred to PricewaterhouseCoopers, LLP (“PWC”), or if PWC is unable or unwilling to serve in such capacity, an independent nationally recognized accounting firm mutually selected by Buyer Purchaser and Seller shall appoint by mutual agreement the office of an impartial nationally or regionally recognized firm of independent certified public accountants other than Seller’s accountants or Purchaser’s accountants (the “Accounting Arbitrator”). Each ) make a binding determination as to the remaining Disputed Items (and only such Disputed Items remaining in dispute after such forty-five (45) day period) (the “Unresolved Disputed Items”) in accordance with this Agreement and the final calculation of the Final Closing Date Cash Payment based solely on the resolution of such Unresolved Disputed Items. Purchaser and Seller will use reasonable efforts to cause the ‎Accounting Arbitrator to render its decision as ​ ​ soon as practicable thereafter, including by ‎promptly complying with all reasonable requests by the Accounting Arbitrator for information, ‎books, records and similar items. ‎Seller and Purchaser will jointly instruct the Buyer may submit Accounting Arbitrator to make a determination of the Unresolved Disputed Items (i) in writing, (ii) as promptly as practicable after such written evidence and supporting documentation as they deem appropriate Unresolved Disputed Items have been referred to the Arbitrator. The Accountant Arbitrator (but in no event later than forty-five (45) days thereafter), (iii) in accordance with this Agreement and (iv) the Accounting Arbitrator shall not hold any hearings or accept oral testimony. The scope consider only those Unresolved Disputed Items and base its determination within the range of the disputes to be resolved values assigned by the parties to each Unresolved Disputed Item and solely on the information, books, records and similar items submitted by Purchaser and Seller. In resolving any Unresolved Disputed Item, the Accounting Arbitrator shall be limited to the items in dispute that were timely and properly included in Dispute Report and the Arbitrator is not to make any other determination. The Arbitrator in making its determination shall may not assign a value to any Unresolved Disputed Item greater than the greatest value for such item claim by either party or a smaller less than the smallest value for such item Unresolved Disputed Item claimed by either partyParty. The decision of the Accounting Arbitrator shall be instructed to use every reasonable effort to make its determination final and binding upon the Parties and enforceable by any court of competent jurisdiction and the Accounting Arbitrator’s final calculations of the Unresolved Disputed Items, along with respect to such Disputed Matter (the items previously agreed upon or deemed agreed upon by the Parties in accordance with the foregoing clauses of this Section 1.04(b) shall be the “DeterminationFinal Working Capital”) within 30 days of the submission to it of such Disputed Matter. The Buyer , “Final Debt”, “Final Company Transaction Expenses” “Final Redemption Payments”, “Final Related Party Transaction Payments”, and/or “Final Restricted Distributions”, as applicable, and the Seller shall give the Arbitrator access at all reasonable times to the books, records and accounts resulting calculation of the Business used to prepare the Closing Date Balance Sheet. After completing Cash Payment calculated in accordance with Section 1.02, using the Determination, amounts determined by the Accounting Arbitrator shall deliver notice of the Determination to the Buyer and the Seller and items previously agreed upon receipt thereof, or deemed agreed upon by the Determination shall be final, binding and conclusive on Parties in accordance with the parties hereto with respect to such Disputed Matter. Judgment may be entered upon the determination of the Arbitrator in any court having jurisdiction over the party against which such determination is to be enforced. (d) An adjustment to the Estimated Closing Date Basic Purchase Price shall be calculated as follows: (i) If the Estimated Closing Date Basic Purchase Price exceeds the Final Basic Purchase Price as determined pursuant to Section 3.4, then the Seller shall pay over to the Buyer in cash the amount of such excess. (ii) If the Final Basic Purchase Price as determined pursuant to Section 3.4 exceeds the Estimated Closing Date Basic Purchase Price then the Buyer shall pay over to the Seller in cash the amount of such excess. (iii) The payment due to Buyer or Seller, as the case may be, under foregoing clauses (i) or (ii) of this Section 3.4(d1.04(b) as inputs therein shall be paid, together with interest thereon, at the rate of 8% per annum from, and including, the “Final Closing Date toCash Payment”, but excludingwhich, the date of paymentin each case, shall be made deemed final, conclusive and binding upon the Parties for all purposes of this Agreement. If required by wire transfer of immediately available funds within five (5) business days after the date on which the Closing StatementAccounting Arbitrator, Seller and Purchaser shall share, in equal proportion, the Assetpayment of any up-Liability Ratiofront retainer for the engagement of the Accounting Arbitrator; provided, the Markdown Pool Amount and the Additional Royalty Payment are finally determined however, that any such retainer shall be subject to adjustment in accordance with this Section 3.4.the immediately following sentence. The fees and expenses of the Accounting Arbitrator shall be paid by Purchaser and Seller in inverse proportion to the relative Disputed Items determined to be for the account of Purchaser and Seller, respectively (such that if the Accounting Arbitrator rules 25% in favor of the first Party and 75% in favor of the second Party, the first Party will pay 75% of the fees and expenses of the Accounting Arbitrator and the second Party will pay 25%). No Party will disclose to the Accounting Arbitrator, and the Accounting Arbitrator will not consider ‎for any purpose, any settlement discussions or settlement offer made by any Party.‎

Post-Closing Purchase Price Adjustments. The Seller and the Buyer agree that the Estimated Closing Date Basic Purchase Price shall be adjusted following the Closing as follows: (a) Within 60 At or prior to Closing, the Shareholders shall provide to the Purchaser a written statement (the "Working Capital Statement"), in form and substance satisfactory to the Purchaser, setting forth the amount of the Company's Working Capital as of the Closing Date by category (including cash, accounts receivable ("Closing Date Receivables"), accounts payable and accrued liabilities (such accounts payable and accrued liabilities referred to collectively as the Closing Date Payables") in reasonable detail, together with the projected cash requirements of the Company for the 60-day period following the Closing, which the Shareholders shall represent is sufficient to enable the Company to carry on business operations independently and pay all overhead costs in the ordinary course and in a manner consistent with past practice for a period of sixty (60) days from the Closing Date (the "Cash Requirement"). (b) Immediately prior to the Closing, the Shareholders shall cause the Company to pay all outstanding accounts payable included within the Closing Date Payables, and shall deliver to the Purchaser an amount equal to the accrued liabilities included within the Closing Date Payables. (c) At Closing, the Shareholders shall cause the Company to retain cash in an amount equal to the Cash Requirement (the "Cash Advance"). The Cash Advance shall be returned by the Company to the Shareholders no later than one hundred twenty (120) days after the Closing Date (the "Cash Advance Repayment Date"), subject to adjustment for undisclosed or outstanding Closing Date Payables as set forth in this Section 2.5 below. (d) At the Closing, the Company shall assign to the Shareholders the Closing Date Receivables set forth on the Working Capital Statement. During the period from the Closing Date through the date that is one hundred twenty (120) days after the Closing Date, the Buyer Company shall prepare use commercially reasonable efforts to collect the Closing Date Receivables for the benefit of the Shareholders, provided that the Company shall not be required in connection with any such collection efforts to institute any action, suit or proceeding, or incur any cost or expense, or to take any action other than normal and deliver customary collection procedures. The Company shall not be liable to the Seller Shareholders for any uncollected Closing Date Receivables as to which it undertakes commercially reasonable collection efforts, as set forth above. (e) An amount equal to the sum of any Closing Date Payables that are either unpaid as of the Cash Advance Repayment Date or not disclosed on the Working Capital Statement shall be either (i) a statement (deducted from the “Closing Statement”) setting forth the Adjusted Inventory Amount, the amount of Prepaid Assets, the amount of the Assumed Accounts Payable, the Accrued Vacation Liability Amount, the Additional Royalty Payment Amount and the Accrued Expenses amount, in each case as of the Closing Date and (ii) the Buyer’s calculation of (a) the Asset-Liability Ratio Amount, (b) the Markdown Pool Amount and (c) the Final Basic Purchase Price. The Prepaid Asset Amount, the amount of Assumed Accounts Payable shall Cash Advance to be determined in accordance with GAAP applied on a consistent basis with the accounting principles used in the preparation of the Balance Sheet. The Accrued Expenses amount shall be determined in accordance with GAAP and reflect the amounts due and outstanding as of the Closing Date for the respective categories included in Schedule 1.1 notwithstanding the Seller’s historical accounting practices therefor. The Adjusted Inventory Amount shall be determined using the agreed-upon valuation assumptions set forth in Schedule 3.4(a) applied to the FIFO (meaning “first-in-first-out”) cost of the Conveyed Inventory, determined in accordance with GAAP. The delivery of the Closing Statement shall be accompanied by all information reasonably necessary to determine the Asset-Liability Ratio, the Asset-Liability Ratio Amount, the Adjusted Inventory Amount, the Prepaid Asset amount, the Accrued Vacation Liability amount, the Accrued Expenses amount and the amount of Assumed Accounts Payable, the Additional Royalty Payment Amount and the Markdown Pool Amount (including detailed schedules of Current Inventory, Medium Term Inventory, BSRs, Transition Inventory, Scheduled 4/25 Inventory, Scheduled 5/25 Inventory, Purchase Order Scheduled 5/25 Inventory, Purchase Order Scheduled 4/25 Inventory, Prepaid Assets, Accrued Vacation Liability, Accrued Expenses and lists of Assumed Accounts Payable in each case at the Closing Date). The Seller shall cooperate with the Buyer in the preparation of the Closing Statement. Simultaneously with the delivery of the Closing Statement, the Buyer shall notify the Seller in writing of the amount, if any, that the Buyer believes is payable pursuant to Section 3.4(d) below. (b) The Buyer, upon prior notice by the Seller, shall allow the Seller and its agents access at all reasonable times after the Closing Date to the applicable books, records and accounts of the Business reasonably related to the preparation of the Closing Statement to allow the Seller to examine the accuracy of the Closing Statement. Within 30 days after the date that the Closing Statement is delivered by the Buyer to the Seller, the Seller shall complete its examination thereof and may deliver to the Buyer a written report setting forth in reasonable detail any proposed adjustments to the Closing Statement, which may include claims that items included in the Current Inventory, Medium Term Inventory, BSRs, Transition Inventory, Scheduled 4/25 Inventory, Scheduled 5/25 Inventory, Purchase Order Scheduled 5/25 Inventory, Purchase Order Scheduled 4/25 Inventory, Prepaid Assets, Accrued Vacation Liability, Accrued Expenses or Assumed Accounts Payable are not properly included (the “Dispute Report”). If the Seller notifies the Buyer of its acceptance of the Adjusted Inventory Amount, Prepaid Asset amount, Accrued Vacation Liability amount, the amount of Accrued Expenses and the amount of Assumed Accounts Payable amount, the Markdown Pool Amount, the Additional Royalty Payment Amount or the Final Basic Purchase Price set forth repaid on the Closing Statement, or if the Seller fails to deliver the Dispute Report within the 30-day period specified in the preceding sentence, the amounts set forth in the Closing Statement shall be final, conclusive and binding on the parties as of the last day of such 30-day period. (c) If the Seller timely delivers the Dispute Report, the Buyer and the Seller shall use good faith efforts to resolve any dispute involving the Adjusted Inventory Amount, the Prepaid Asset Amount, Accrued Vacation Liability, Assumed Accounts Payable Amount, the Additional Royalty Payment Amount, the Markdown Pool Amount and/or the Final Basic Purchase Price (each, a “Disputed Matter”), and any resolution between them as to a Disputed Matter shall be final, binding and conclusive on the parties hereto and shall be evidenced by a written agreement to that effect. However, if, after 30 days following the receipt by the Buyer of the Dispute Report, the Seller and the Buyer are unable to resolve any Disputed Matter, such Disputed Matter shall be referred to PricewaterhouseCoopers, LLP (“PWC”), or if PWC is unable or unwilling to serve in such capacity, an independent nationally recognized accounting firm mutually selected by Buyer and Seller (the “Arbitrator”). Each of the Seller and the Buyer may submit such written evidence and supporting documentation as they deem appropriate to the Arbitrator. The Arbitrator shall not hold any hearings or accept oral testimony. The scope of the disputes to be resolved by the Arbitrator shall be limited to the items in dispute that were timely and properly included in Dispute Report and the Arbitrator is not to make any other determination. The Arbitrator in making its determination shall not assign a value greater than the greatest value for such item claim by either party or a smaller than the smallest value for such item claimed by either party. The Arbitrator shall be instructed to use every reasonable effort to make its determination with respect to such Disputed Matter (the “Determination”) within 30 days of the submission to it of such Disputed Matter. The Buyer and the Seller shall give the Arbitrator access at all reasonable times to the books, records and accounts of the Business used to prepare the Closing Cash Advance Repayment Date Balance Sheet. After completing the Determination, the Arbitrator shall deliver notice of the Determination to the Buyer and the Seller and upon receipt thereof, the Determination shall be final, binding and conclusive on the parties hereto with respect to such Disputed Matter. Judgment may be entered upon the determination of the Arbitrator in any court having jurisdiction over the party against which such determination is to be enforced. (d) An adjustment to the Estimated Closing Date Basic Purchase Price shall be calculated as follows: (i) If the Estimated Closing Date Basic Purchase Price exceeds the Final Basic Purchase Price as determined pursuant to Section 3.4, then the Seller shall pay over to the Buyer in cash the amount of such excess. (ii) If the Final Basic Purchase Price as determined pursuant to Section 3.4 exceeds the Estimated Closing Date Basic Purchase Price then the Buyer shall pay over to the Seller in cash the amount of such excess. (iii) The payment due to Buyer or Seller, as the case may be, under clauses (i) or (ii) of this Section 3.4(d) shall be paid, together with interest thereon, at the rate of 8% per annum from, and including, the offset against Closing Date toReceivables collected by the Company, but excludingwith the Shareholders liable for any remaining unpaid Closing Date Payables on a pro rata basis, based on their respective stock ownership in the date of payment, shall Company immediately prior to the Closing. Any such unpaid shortfall may be made offset by wire transfer of immediately available funds within five (5) business days after the date on which Purchaser against the Closing Statement, first payments due under the Asset-Liability Ratio, the Markdown Pool Amount and the Additional Royalty Payment are finally determined in accordance with this Section 3.4Seller Notes.