Common use of Adjustment Procedures Clause in Contracts

Adjustment Procedures. (1) Not later than 60 days after the Closing Date (as defined in Article 2 hereof), the Buyer will prepare and deliver to the Sellers' Agent an unaudited balance sheet (the "Closing Balance Sheet") of the Sellers as of the Effective Closing Date, consisting of computations of (A) the Net Current Assets, and (B) the tangible book value as of the Effective Closing Date of the Purchased Assets (excluding goodwill and other intangible assets) less the book value as of the Effective Closing Date of the Assumed Liabilities, all as determined in accordance with 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 (but not some) of such Seller's used vehicles, it being understood that the 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 for more than 60 days as of the Closing 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; and there shall be included appropriate reserves and/or write-offs for doubtful accounts receivable and bad debts and for damaged, spoiled, obsolete, defective or slow-moving inventory. As used herein, the term "slow moving" means (i) with 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 may be reasonably determined by the Buyer, the Sellers having a right to arbitrate disputes with respect to such other inventory. If within 30 days following delivery of the Closing Balance Sheet (or the next Business Day if such 30th day is 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 "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 the issues in dispute; (iii) such determination by the Accountants 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 parties; and (iv) the Buyer and the Sellers shall each bear 50% of the fees and expenses of the Accountants for such determination.

Adjustment Procedures. (1i) Not later than 60 days after the Closing Date (as defined in Article 2 hereof)Date, the Buyer will prepare and deliver to the Sellers' Agent Seller, an unaudited balance sheet (the "Closing ------- Balance Sheet") of the Sellers Company as of the Effective Closing Date, consisting of computations a ------------- computation of the net book value of the tangible assets of the Company (A) excluding the Net Current Distributed Assets, and (Bas defined in Section 1.5 hereof) the tangible book value as of the Effective Closing Date of the Purchased Assets (excluding goodwill and other intangible assets) less the book value as of the Effective Closing Date of the Assumed Liabilities, all as determined in accordance with 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 (but not some) of such Seller's used vehicles, it being understood that the 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 for more than 60 days as of the Closing Date; no 1997 or older vehicles , less the book value of the liabilities of the Company as of the Closing Date, all in accordance with generally accepted accounting principles (other than up to a total of 15 1997 new vehicles acceptable "GAAP") as consistently applied by the Company and subject to the Buyerexceptions 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; (B) the liabilities of the Company shall include any 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; (C) there shall not be included in new vehicle inventory; and there shall be included appropriate reserves and/or write-offs a reserve for doubtful accounts receivable and bad debts 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 damaged, spoiled, obsolete, defective or slow-moving inventory. As used herein, the term "slow moving" means (i) with 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 may be reasonably determined by the Buyer, the Sellers having a right to arbitrate disputes with respect to such other inventory. If within 30 days following delivery of the Closing Balance Sheet (or the next Business Day if such 30th day is 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 which there are 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 place reimbursement arrangements acceptable to the Buyer and shall be included as assets; (E) the Sellers' Agent (liabilities of the "Accountants") Company shall include appropriate accruals 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)all Tax liabilities, and will be afforded all other costs and expenses, of the opportunity to present to the Accountants any material relating to the determination and to discuss the determination Company associated with the Accountantsdistribution of the Distributed Assets; (iiF) 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 as liabilities of the Company; (G) the Accountants will be instructed to determine the Net Current Assets based upon their resolution assets of the issues in dispute; (iii) such determination by Company shall include the Accountants depreciated book value of the Net Current AssetsOwned Real Property, as set forth in a notice delivered including the improvements located thereon, but shall not include leasehold improvements unless they are subject to the parties by the Accountants, will be binding and conclusive on the Leases with third parties; and (ivH) the Buyer and the Sellers shall each bear 50% values of the fees and expenses of the Accountants for such determination.following asset categories shall be calculated as follows:

Adjustment Procedures. (1) Not later than 60 days after the Closing Date (as defined in Article 2 hereof), the Buyer will prepare and deliver to the Sellers' Agent an unaudited balance sheet (the "Closing Balance SheetCLOSING BALANCE SHEET") of the Sellers as of the Effective Closing Date, consisting of computations of (A) the Net Current Assets, and (B) the tangible book value as of the Effective Closing Date of the Purchased Assets (excluding goodwill and other intangible assets) less the book value as of the Effective Closing Date of the Assumed Liabilities, all as determined in accordance with GAAP; providedPROVIDED, howeverHOWEVER, 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 (but not some) of such Seller's used vehicles, it being understood that the 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 for more than 60 days as of the Closing 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; and there shall be included appropriate reserves and/or write-offs for doubtful accounts receivable and bad debts and for damaged, spoiled, obsolete, defective or slow-moving inventory. As used herein, the term "slow moving" means (i) with 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 may be reasonably determined by the Buyer, the Sellers having a right to arbitrate disputes with respect to such other inventory. If within 30 days following delivery of the Closing Balance Sheet (or the next Business Day if such 30th day is 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 "AccountantsACCOUNTANTS") 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 the issues in dispute; (iii) such determination by the Accountants 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 parties; and (iv) the Buyer and the Sellers shall each bear 50% of the fees and expenses of the Accountants for such determination.

Adjustment Procedures. (1i) Not later than 60 days after the Closing Date (as defined in Article 2 hereof)Date, the Buyer will prepare and deliver to the Sellers' Agent Seller, an unaudited combined balance sheet (the "Closing Balance Sheet") of the Sellers Companies as of the Effective Closing Date, consisting of computations --------------------- a computation of the net book value of the tangible assets of the Companies (A) excluding the Net Current Distributed Assets, and (Bas defined in Section 1.5 hereof) the tangible book value as of the Effective Closing Date of the Purchased Assets (excluding goodwill and other intangible assets) less the book value as of the Effective Closing Date of the Assumed Liabilities, all as determined in accordance with 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 (but not some) of such Seller's used vehicles, it being understood that the 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 for more than 60 days as of the Closing Date; no 1997 or older vehicles , less the book value of the liabilities of the Companies as of the Closing Date, all in accordance with generally accepted accounting principles (other than up to a total of 15 1997 new vehicles acceptable "GAAP") as consistently applied by the Companies and subject to the Buyerexceptions ---- 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; (B) the liabilities of the Companies shall include any 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; (C) there shall not be included in new vehicle inventory; and there shall be included appropriate reserves and/or write-offs a reserve for doubtful accounts receivable and bad debts 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 damaged, spoiled, obsolete, defective or slow-moving inventory. As used herein, the term "slow moving" means (i) with 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 may be reasonably determined by the Buyer, the Sellers having a right to arbitrate disputes with respect to such other inventory. If within 30 days following delivery of the Closing Balance Sheet (or the next Business Day if such 30th day is 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 which there are 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 place reimbursement arrangements acceptable to the Buyer and shall be included as assets; (E) all real property (other than leasehold improvements subject to a Lease) shall be excluded as assets; (F) the Sellers' Agent (liabilities of the "Accountants") Companies shall include appropriate accruals 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)all Tax liabilities, and will be afforded all other costs and expenses, of the opportunity to present to the Accountants any material relating to the determination and to discuss the determination Companies associated with the Accountantsdistribution of the Distributed Assets; (iiG) in the Accountants will 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 instructed to determine the Net Current Assets based upon their resolution included as liabilities of the issues in dispute; (iii) such determination by the Accountants 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 partiesCompanies; and (ivH) the Buyer and the Sellers shall each bear 50% values of the fees and expenses of the Accountants for such determination.following asset categories shall be calculated as follows: