(5) year period plus the lesser of costs and the then-current wholesale market value of all usable inventory of Products, materials and supplies (i.e. in good and saleable condition and not obsolete or discontinued), or The product of the Unit's average cash flow for the two (2) most recently completed fiscal years multiplied by two (2). "Cash flow" represents the Unit's net revenues less all pretzel unit-related costs (i.e., cost of goods sold, labor, occupancy and other Unit expenses) as well as annual administrative costs of ten thousand dollars ($10,000.00) and royalty and service fees, but not including interest and depreciation. (2) Pretzel Time and its Affiliates shall have the right to set off against and reduce the purchase price by any and all amounts owed by Franchisee to Pretzel Time and its Affiliates. Pretzel Time may exclude from the assets purchased hereunder any equipment, furnishings, signs, usable inventory of Products, materials or supplies of the Unit that Pretzel Time has not approved as meeting its standards for Pretzel Time Unit, and the purchase price shall be reduced by the replacement costs of such excluded items which are required in the operation of the Unit. (3) The purchase price shall be paid in cash at the closing of the purchase, which shall take place no later than ninety (90) days after receipt by Franchisee of Pretzel Time's notice of exercise of this option to purchase the Unit, at which time Franchisee shall deliver instruments transferring to Pretzel Time or its assignee good and merchantable title to the assets purchased, free and clear of all liens and encumbrances with all sales and other transfer taxes paid by Franchisee, and all licenses or permits of the Unit which may be assigned or transferred. In the event the closing of the purchase does