Common use of Adjustment of Reserves and Valuation Accounts Clause in Contracts

Adjustment of Reserves and Valuation Accounts. In the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount, except as otherwise set forth in this Attachment VI, the amount of any reserves or valuation accounts shall be determined by applying methods, practices, assumptions, policies, factors and underlying data consistent with those used in determining the reserves or valuation accounts included in the December Statement, and there shall be no changes made to any reserves or valuation accounts (including, without limitation, contract reserves, purchase accounting reserves, allowances for bad debts, inventory reserves of any kind, warranty reserves and other reserves), except to the extent that such changes are required by changes in facts and events occurring after December 31, 1996 and before the Effective Date, it being further understood that there shall be no increase in the Proposed Final Net Tangible Asset Amount or the Final Net Tangible Asset Amount as a result of any reversal or other usage of reserves unless such reversal or usage arises out of facts or events that occur after December 31, 1996; provided, however, that notwithstanding the foregoing any reversal or other usage of the Advanced Recorders IR & VLDS Inventory Reserve of $1,100,000 million, the Advanced Recorders IR & VLDS Capitalized G&A reserve of $800,000 or the Advanced Recorders IR & VLDS fixed asset reserve of $1,030,000 in connection with any sale of all or a portion of such business to a third party prior to the Effective Date will result in a corresponding increase in the Proposed Final Net Tangible Asset Amount or the Final Net Tangible Asset Amount.