MASTER ASSET PURCHASE AGREEMENT BY ... - Canadian Stocks

EXHIBIT E
Accounting Principles
**Capitalized terms used but not defined in this Exhibit E have the meaning set forth in
the Master Asset Purchase Agreement to which this Exhibit E is attached.
1. Initial Closing Inventory Count.
a. The Initial Closing Inventory Count shall be conducted beginning up to 30 days
prior to the Initial Closing according to the following principles:
i. Acquired WIP inventory will not be included in the Initial Closing
Inventory Count. Each Acquired WIP work order will be individually
reviewed and reconciled to the actual parts, labor and subcontract material
on the order. Any adjustments resulting from this reconciliation process
will be posted in the system prior to the creation of the final Acquired WIP
inventory value that will be transferred.
ii. Seller will count and reconcile 70% of the value of the Initial Closing
Acquired Inventory, excluding Acquired WIP, at Seller’s facility(s).
iii. Seller will count and reconcile an additional 10% of the remaining part
numbers of Initial Closing Acquired Inventory, selected at random and
excluding Acquired WIP, not included in section (ii) above.
iv. In the event the inventory counts conducted pursuant to sections (ii) and
(iii) above result in a net adjustment in excess of 3% or a gross adjustment
in excess of 8%, Seller will count and reconcile an additional 10% of the
value of the Initial Closing Acquired Inventory, excluding Acquired WIP,
at Seller’s facility(s) that was not counted pursuant to section (ii) or (iii)
above.
v. In the event the inventory counts conducted pursuant to sections (ii), (iii)
and (iv) above result in a net adjustment in excess of 3% or a gross
adjustment in excess of 8%, then, at Seller’s option (after consulting in
good faith with Buyer), (A) Seller will count and reconcile all remaining
Initial Closing Acquired Inventory not counted pursuant to section (ii),
(iii) or (iv) above or (B) Seller will reconcile all remaining Initial Closing
Acquired Inventory at Seller’s facilities not counted pursuant to section
(ii), (iii) or (iv) above by applying to such remaining inventories the net
adjustment rate resulting from the inventory counts conducted pursuant to
sections (ii), (iii) and (iv) above.
vi. Seller will count and reconcile 60% of the value of the Initial Closing
Acquired Inventory at consignment locations (customer mine sites).
E-2
Exhibit E
Accounting Principles