Common use of Adjustment Procedures Clause in Contracts

Adjustment Procedures. (1) Not later than 60 days after the Closing Date, the Buyer will prepare and deliver to the Seller an unaudited consolidated balance sheet (the "CLOSING BALANCE SHEET") of the Companies as of the Closing Date, consisting of a computation of the consolidated net book value of the tangible assets of the Companies as of the Closing Date, less the consolidated book value of the liabilities of the Companies as of the Closing Date, all as determined in accordance with generally accepted accounting principles consistently applied ("GAAP") and utilizing the first in-first out (FIFO) method of inventory accounting. In preparing the Closing Balance Sheet: (A) no 1997 or older vehicles shall be included in new vehicle inventory; (B) used vehicle inventories shall be valued as mutually agreed by the Buyer and the Seller, based upon a physical inventory to be conducted by them not later than the Business Day immediately preceding the Closing Date, PROVIDED, HOWEVER, that with respect to any used vehicle as to which the Buyer and the Seller cannot agree upon a value, such vehicle shall be valued as proposed by the Buyer, except that the applicable Merging Company may sell such used vehicle prior to the Closing Date (including a sale to the Seller) at a price to be determined by the Seller; (C) parts inventories shall be valued in the same manner as "Parts" are valued in the Asset Purchase Agreement; (D) the liabilities of the Companies shall include any tax liabilities associated with the conversion from the last in-first out (LIFO) method of accounting to the FIFO method of accounting and tax liabilities associated with the distribution of the Hartsville properties; (E) there shall be included appropriate write-offs for doubtful accounts receivable and bad debts and for damaged, spoiled, obsolete or slow-moving inventory; (F) there shall be included an appropriate reserve for liabilities of the Companies, as well as for the "Sellers" under the Asset Purchase Agreement, in connection with the issuance by the Companies and such "Sellers" of extended warranties; and (G) the tangible net book value will be calculated without giving effect to the value of any real property or leasehold improvements. The tangible net book value reflected on the Closing Balance Sheet is hereinafter called the "NET BOOK VALUE." The cost of parts inventory counts shall be borne equally by the Buyer, on the one hand, and the Seller, on the other hand.

Adjustment Procedures. (1i) Not later than 60 days after the Closing Date, the Buyer will prepare and deliver to the Seller Seller, an unaudited consolidated combined balance sheet (the "CLOSING BALANCE SHEETClosing Balance Sheet") of the Companies as of the Closing Date, consisting of --------------------- a computation of the consolidated net book value of the tangible assets of the Companies (excluding the Distributed Assets, as defined in Section 1.5 hereof) as of the Closing Date, less the consolidated book value of the liabilities of the Companies as of the Closing Date, all as determined in accordance with generally accepted accounting principles consistently applied ("GAAP") as consistently applied by the Companies and utilizing subject to the exceptions ---- to GAAP set forth on Schedule 3.13, and subject to the additional principles set ------------- forth below. The tangible net book value reflected on the Closing Balance Sheet is hereinafter called the "Net Book Value." The Closing Balance Sheet will be -------------- prepared in accordance with the following additional principles: (A) it will utilize the first in-first out (FIFO) method of inventory accounting. In preparing the Closing Balance Sheet: (A) no 1997 or older vehicles shall be included in new vehicle inventory; (B) used vehicle inventories shall be valued as mutually agreed by the Buyer and the Seller, based upon a physical inventory to be conducted by them not later than the Business Day immediately preceding the Closing Date, PROVIDED, HOWEVER, that with respect to any used vehicle as to which the Buyer and the Seller cannot agree upon a value, such vehicle shall be valued as proposed by the Buyer, except that the applicable Merging Company may sell such used vehicle prior to the Closing Date (including a sale to the Seller) at a price to be determined by the Seller; (C) parts inventories shall be valued in the same manner as "Parts" are valued in the Asset Purchase Agreement; (D) the liabilities of the Companies shall include any tax Tax (as defined in Section 3.21(a)) liabilities associated with the conversion from the last in-first out (LIFO) method of accounting to the FIFO method of accounting accounting; (C) there shall not be included a reserve for doubtful accounts receivable and tax bad debts; (D) any receivables due the Companies from the Seller or any of the directors, officers, employees or Affiliates (as defined in Section 3.5 below) of the Companies or the Seller shall be excluded as assets, provided, that any such receivables from employees that are not material in amount and are in the ordinary course of the Company's business and for which there are in place reimbursement arrangements acceptable to the Buyer shall be included as assets; (E) all real property (other than leasehold improvements subject to a Lease) shall be excluded as assets; (F) the liabilities of the Companies shall include appropriate accruals for all Tax liabilities, and all other costs and expenses, of the Companies associated with the distribution of the Hartsville propertiesDistributed Assets; (EG) there in the event that the Distributed Assets are subject to any liabilities or encumbrances which are not satisfied and discharged in full at or prior to Closing, such liabilities and encumbrances shall be included appropriate write-offs for doubtful accounts receivable and bad debts and for damaged, spoiled, obsolete or slow-moving inventory; (F) there shall be included an appropriate reserve for as liabilities of the Companies, as well as for the "Sellers" under the Asset Purchase Agreement, in connection with the issuance by the Companies and such "Sellers" of extended warranties; and (GH) the tangible net book value will values of the following asset categories shall be calculated without giving effect to the value of any real property or leasehold improvements. The tangible net book value reflected on the Closing Balance Sheet is hereinafter called the "NET BOOK VALUE." The cost of parts inventory counts shall be borne equally by the Buyer, on the one hand, and the Seller, on the other hand.as follows:

Adjustment Procedures. (1) Not later than 60 days after the Closing DateDate (as defined in Article 2 hereof), the Buyer will prepare and deliver to the Seller Sellers' Agent an unaudited consolidated balance sheet (the "CLOSING BALANCE SHEET") of the Companies Sellers as of the Effective Closing Date, consisting of a computation computations of (A) the consolidated net Net Current Assets, and (B) the tangible book value of the tangible assets of the Companies as of the Effective Closing Date, Date of the Purchased Assets (excluding goodwill and other intangible assets) less the consolidated book value of the liabilities of the Companies as of the Effective Closing DateDate of the Assumed Liabilities, all as determined in accordance with generally accepted accounting principles consistently applied GAAP; PROVIDED, HOWEVER, that: new vehicle inventories shall be valued at factory invoice less factory holdback, dealer rebates, and any other factory incentives; used vehicle inventories shall include those vehicles of the respective Sellers chosen by the Buyer on an "all or nothing" basis, meaning that, as to each Seller, the Buyer shall be free to choose either all or none ("GAAP"but not some) and utilizing of such Seller's used vehicles, it being understood that the first in-first out (FIFO) method Buyer shall not be required, in any case, to choose any used vehicles of the Seller which have been in such Seller's used vehicle inventory accounting. In preparing for more than 60 days as of the Closing Balance Sheet: (A) Date; no 1997 or older vehicles (other than up to a total of 15 1997 new vehicles acceptable to the Buyer) shall be included in new vehicle inventory; (B) used vehicle inventories shall be valued as mutually agreed by the Buyer and the Seller, based upon a physical inventory to be conducted by them not later than the Business Day immediately preceding the Closing Date, PROVIDED, HOWEVER, that with respect to any used vehicle as to which the Buyer and the Seller cannot agree upon a value, such vehicle shall be valued as proposed by the Buyer, except that the applicable Merging Company may sell such used vehicle prior to the Closing Date (including a sale to the Seller) at a price to be determined by the Seller; (C) parts inventories shall be valued in the same manner as "Parts" are valued in the Asset Purchase Agreement; (D) the liabilities of the Companies shall include any tax liabilities associated with the conversion from the last in-first out (LIFO) method of accounting to the FIFO method of accounting and tax liabilities associated with the distribution of the Hartsville properties; (E) there shall be included appropriate reserves and/or write-offs for doubtful accounts receivable and bad debts and for damaged, spoiled, obsolete obsolete, defective or slow-moving inventory; . As used herein, the term "slow moving" means (Fi) there shall be included an appropriate reserve for liabilities of the Companieswith respect to returnable parts, returnable parts older than twelve months, (ii) with respect to new vehicles, new vehicles older than 300 days, and (iii) with respect to other inventory (excluding used vehicles), as well as for the "Sellers" under the Asset Purchase Agreement, in connection with the issuance may be reasonably determined by the Companies and Buyer, the Sellers having a right to arbitrate disputes with respect to such "Sellers" other inventory. If within 30 days following delivery of extended warranties; and (G) the tangible net book value will be calculated without giving effect to the value of any real property or leasehold improvements. The tangible net book value reflected on the Closing Balance Sheet (or the next Business Day if such 30th day is hereinafter called not a Business Day), the Sellers' Agent has not given the Buyer notice of the Sellers' objection to the computations of the Net Current Assets as set forth in the Closing Balance Sheet (such notice to contain a statement in reasonable detail of the nature of the Sellers' objection), then the Net Current Assets reflected in the Closing Balance Sheet will be deemed mutually agreed by the Buyer and the Sellers. If the Sellers' Agent shall have given such notice of objection in a timely manner, then the issues in dispute will be submitted to a "Big Six" accounting firm mutually acceptable to the Buyer and the Sellers' Agent (the "NET BOOK VALUE." The cost ACCOUNTANTS") for resolution. If issues in dispute are submitted to the Accountants for resolution, (i) each party will furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to the party or its subsidiaries (or its independent public accountants), and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants; (ii) the Accountants will be instructed to determine the Net Current Assets based upon their resolution of parts inventory counts shall be borne equally the issues in dispute; (iii) such determination by the BuyerAccountants of the Net Current Assets, as set forth in a notice delivered to the parties by the Accountants, will be binding and conclusive on the one hand, parties; and (iv) the Buyer and the Seller, on Sellers shall each bear 50% of the other handfees and expenses of the Accountants for such determination.

Adjustment Procedures. (1i) Not later than 60 days after the Closing Date, the Buyer will prepare and deliver to Joseph Herson (the Seller an "SELLERX' XXXXX") xx unaudited consolidated balance sheet (the "CLOSING BALANCE SHEET") of the Companies Company as of the Closing Date, consisting of a computation of the consolidated net book value of the tangible assets (including without limitation receivables, security deposits and assets in respect of Taxes) of the Companies Company (excluding the Distributed Assets, as defined in Section 1.7) as of the Closing Date, less the consolidated book value of the liabilities of the Companies Company (excluding the Distributed Liabilities, as defined in Section 1.7) as of the Closing Date, all as determined in accordance with generally accepted accounting principles consistently applied ("GAAP"), except as provided below. The tangible net book value reflected on the Closing Balance Sheet is hereinafter called the "NET BOOK VALUE." The Closing Balance Sheet will be prepared in accordance with the following principles: (A) and utilizing it will utilize the first in-first out (FIFO) method of inventory accounting. In preparing the Closing Balance Sheet: (A) no 1997 or older vehicles shall be included in new vehicle inventory; (B) used vehicle inventories shall be valued as mutually agreed by the Buyer and the Seller, based upon a physical inventory to be conducted by them not later than the Business Day immediately preceding the Closing Date, PROVIDED, HOWEVER, that with respect to any used vehicle as to which the Buyer and the Seller cannot agree upon a value, such vehicle shall be valued as proposed by the Buyer, except that the applicable Merging Company may sell such used vehicle prior to the Closing Date (including a sale to the Seller) at a price to be determined by the Seller; (C) parts inventories shall be valued in the same manner as "Parts" are valued in the Asset Purchase Agreement; (D) the liabilities of the Companies Company shall include any tax Tax liabilities associated with the conversion from the last in-first out (LIFO) method of accounting to the FIFO method of accounting and tax liabilities associated with the distribution of the Hartsville propertiesaccounting; (EC) there shall be included appropriate write-offs for doubtful accounts receivable and bad debts debts, to the extent not already reserved for in the listing of accounts receivable, and for damaged, spoiledspoiled or obsolete inventory; (D) any receivables due the Company from any of the Sellers, obsolete any of the directors, officers, employees or slow-moving inventoryAffiliates of the Company or any of the persons or entities contemplated by Section 7.8 shall be excluded as assets (except that any cash received contemporaneously with the Closing in satisfaction and payment of such receivables shall be included as assets); (E) the liabilities of the Company shall include appropriate accruals for all Tax liabilities of the Company associated with the distribution of the Distributed Assets and Distributed Liabilities or the forgiveness of any of the Company's indebtedness or other liabilities or obligations owed to any of the persons or entities referred to in Section 7.8 of this Agreement; (F) there any amounts loaned or contributed by the Company to the Leasing Subsidiary (as defined in Section 1.7) shall not be included as an appropriate reserve for liabilities asset; (G) all goodwill carried on the Company's books shall not be included as an asset; (H) the Inducement Fee will not be included as a liability of the Companies, as well as for Company; (I) any liability of the "Sellers" under the Asset Purchase Agreement, Company owed to any persons or entities contemplated by Section 7.8 which is satisfied in connection with the issuance by the Companies and such "Sellers" of extended warrantiesClosing shall not be included as a liability; and (GJ) the tangible net book value will values of the following asset categories shall be calculated without giving effect to the value of any real property or leasehold improvements. The tangible net book value reflected on the Closing Balance Sheet is hereinafter called the "NET BOOK VALUE." The cost of parts inventory counts shall be borne equally by the Buyer, on the one hand, and the Seller, on the other hand.as follows:

Adjustment Procedures. (1i) Not later than 60 days after the Closing Date, the Buyer will prepare and deliver to the Seller Seller, an unaudited consolidated balance sheet (the "CLOSING BALANCE SHEETClosing ------- Balance Sheet") of the Companies Company as of the Closing Date, consisting of a ------------- computation of the consolidated net book value of the tangible assets of the Companies Company (excluding the Distributed Assets, as defined in Section 1.5 hereof) as of the Closing Date, less the consolidated book value of the liabilities of the Companies Company as of the Closing Date, all as determined in accordance with generally accepted accounting principles consistently applied ("GAAP") as consistently applied by the Company and utilizing subject to the exceptions to ---- GAAP set forth on Schedule 3.13, and subject to the additional principles set ------------- forth below. The tangible net book value reflected on the Closing Balance Sheet is hereinafter called the "Net Book Value." The Closing Balance Sheet will be -------------- prepared in accordance with the following additional principles: (A) it will utilize the first in-first out (FIFO) method of inventory accounting. In preparing the Closing Balance Sheet: (A) no 1997 or older vehicles shall be included in new vehicle inventory; (B) used vehicle inventories shall be valued as mutually agreed by the Buyer and the Seller, based upon a physical inventory to be conducted by them not later than the Business Day immediately preceding the Closing Date, PROVIDED, HOWEVER, that with respect to any used vehicle as to which the Buyer and the Seller cannot agree upon a value, such vehicle shall be valued as proposed by the Buyer, except that the applicable Merging Company may sell such used vehicle prior to the Closing Date (including a sale to the Seller) at a price to be determined by the Seller; (C) parts inventories shall be valued in the same manner as "Parts" are valued in the Asset Purchase Agreement; (D) the liabilities of the Companies Company shall include any tax Tax (as defined in Section 3.21(a)) liabilities associated with the conversion from the last in-first out (LIFO) method of accounting to the FIFO method of accounting accounting; (C) there shall not be included a reserve for doubtful accounts receivable and tax bad debts; (D) any receivables due the Company from the Seller or any of the directors, officers, employees or Affiliates (as defined in Section 3.5 below) of the Company or the Seller shall be excluded as assets, provided, that any such receivables from employees that are not material in amount and are in the ordinary course of the Company's business and for which there are in place reimbursement arrangements acceptable to the Buyer shall be included as assets; (E) the liabilities of the Company shall include appropriate accruals for all Tax liabilities, and all other costs and expenses, of the Company associated with the distribution of the Hartsville properties; (E) there shall be included appropriate write-offs for doubtful accounts receivable and bad debts and for damaged, spoiled, obsolete or slow-moving inventoryDistributed Assets; (F) there in the event that the Distributed Assets are subject to any liabilities or encumbrances which are not satisfied and discharged in full at or prior to Closing, such liabilities and encumbrances shall be included an appropriate reserve for as liabilities of the Companies, as well as for the "Sellers" under the Asset Purchase Agreement, in connection with the issuance by the Companies and such "Sellers" of extended warrantiesCompany; and (G) the tangible net assets of the Company shall include the depreciated book value will of the Owned Real Property, including the improvements located thereon, but shall not include leasehold improvements unless they are subject to Leases with third parties; and (H) the values of the following asset categories shall be calculated without giving effect to the value of any real property or leasehold improvements. The tangible net book value reflected on the Closing Balance Sheet is hereinafter called the "NET BOOK VALUE." The cost of parts inventory counts shall be borne equally by the Buyer, on the one hand, and the Seller, on the other hand.as follows:

Adjustment Procedures. (1) Not later than 60 days after the Closing DateDate (as defined in Article 2 hereof), the Buyer will prepare and deliver to the Seller Sellers' Agent an unaudited consolidated balance sheet (the "CLOSING BALANCE SHEETClosing Balance Sheet") of the Companies Sellers as of the Effective Closing Date, consisting of a computation computations of (A) the consolidated net Net Current Assets, and (B) the tangible book value of the tangible assets of the Companies as of the Effective Closing Date, Date of the Purchased Assets (excluding goodwill and other intangible assets) less the consolidated book value of the liabilities of the Companies as of the Effective Closing DateDate of the Assumed Liabilities, all as determined in accordance with generally accepted accounting principles consistently applied GAAP; provided, however, that: new vehicle inventories shall be valued at factory invoice less factory holdback, dealer rebates, and any other factory incentives; used vehicle inventories shall include those vehicles of the respective Sellers chosen by the Buyer on an "all or nothing" basis, meaning that, as to each Seller, the Buyer shall be free to choose either all or none ("GAAP"but not some) and utilizing of such Seller's used vehicles, it being understood that the first in-first out (FIFO) method Buyer shall not be required, in any case, to choose any used vehicles of the Seller which have been in such Seller's used vehicle inventory accounting. In preparing for more than 60 days as of the Closing Balance Sheet: (A) Date; no 1997 or older vehicles (other than up to a total of 15 1997 new vehicles acceptable to the Buyer) shall be included in new vehicle inventory; (B) used vehicle inventories shall be valued as mutually agreed by the Buyer and the Seller, based upon a physical inventory to be conducted by them not later than the Business Day immediately preceding the Closing Date, PROVIDED, HOWEVER, that with respect to any used vehicle as to which the Buyer and the Seller cannot agree upon a value, such vehicle shall be valued as proposed by the Buyer, except that the applicable Merging Company may sell such used vehicle prior to the Closing Date (including a sale to the Seller) at a price to be determined by the Seller; (C) parts inventories shall be valued in the same manner as "Parts" are valued in the Asset Purchase Agreement; (D) the liabilities of the Companies shall include any tax liabilities associated with the conversion from the last in-first out (LIFO) method of accounting to the FIFO method of accounting and tax liabilities associated with the distribution of the Hartsville properties; (E) there shall be included appropriate reserves and/or write-offs for doubtful accounts receivable and bad debts and for damaged, spoiled, obsolete obsolete, defective or slow-moving inventory; . As used herein, the term "slow moving" means (Fi) there shall be included an appropriate reserve for liabilities of the Companieswith respect to returnable parts, returnable parts older than twelve months, (ii) with respect to new vehicles, new vehicles older than 300 days, and (iii) with respect to other inventory (excluding used vehicles), as well as for the "Sellers" under the Asset Purchase Agreement, in connection with the issuance may be reasonably determined by the Companies and Buyer, the Sellers having a right to arbitrate disputes with respect to such "Sellers" other inventory. If within 30 days following delivery of extended warranties; and (G) the tangible net book value will be calculated without giving effect to the value of any real property or leasehold improvements. The tangible net book value reflected on the Closing Balance Sheet (or the next Business Day if such 30th day is hereinafter called not a Business Day), the Sellers' Agent has not given the Buyer notice of the Sellers' objection to the computations of the Net Current Assets as set forth in the Closing Balance Sheet (such notice to contain a statement in reasonable detail of the nature of the Sellers' objection), then the Net Current Assets reflected in the Closing Balance Sheet will be deemed mutually agreed by the Buyer and the Sellers. If the Sellers' Agent shall have given such notice of objection in a timely manner, then the issues in dispute will be submitted to a "Big Six" accounting firm mutually acceptable to the Buyer and the Sellers' Agent (the "NET BOOK VALUE." The cost Accountants") for resolution. If issues in dispute are submitted to the Accountants for resolution, (i) each party will furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to the party or its subsidiaries (or its independent public accountants), and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants; (ii) the Accountants will be instructed to determine the Net Current Assets based upon their resolution of parts inventory counts shall be borne equally the issues in dispute; (iii) such determination by the BuyerAccountants of the Net Current Assets, as set forth in a notice delivered to the parties by the Accountants, will be binding and conclusive on the one hand, parties; and (iv) the Buyer and the Seller, on Sellers shall each bear 50% of the other handfees and expenses of the Accountants for such determination.