Parent Adjusted Net Worth. (a) Parent has delivered to the Company prior to the date hereof estimates of the following information:
(i) the fees and expenses payable by the Parent in connection with the Merger, including, without limitation, the D&O Tail, fees and expenses of Xxxxxx Godward Kronish LLP, BDO Xxxxxxx LLP, Xxxxxx Xxxxxxx & Co., Inc., and any other advisors engaged by Parent or its subsidiaries in connection with the Merger (the “Parent Transaction Expenses”);
(ii) the costs of all severance obligations, including, without limitation, the cost of any unpaid bonuses or benefits, payable to Parent’s or any subsidiary’s management and staff accrued prior to or in connection with the Merger (including as a result of the Merger) (the “Severance Costs”);
(iii) the costs of winding down and closing Parent’s California office, to the extent required after the Disposition (the “Office Wind-Down Costs”);
(iv) all other liabilities and accounts payable that would be required under GAAP to be reflected on Parent’s balance sheet as of the Closing; and
(v) the amount of all taxes due and payable by the Parent and any of its subsidiaries with respect to all tax periods ending on or prior to the Effective Time, including any transferee or successor liability for any of such periods in respect of taxes (whether by contract or otherwise) and any several liability in respect of any tax for any of such periods as a result of being a member of any affiliated, consolidated, combined, unitary or similar group.
(b) No more than five and no fewer than three business days prior to the Closing Date, Parent shall prepare and deliver to the Company a certificate (the “Net Worth Certificate”) containing Parent’s estimate of Parent’s consolidated cash, cash equivalents and accounts receivable as of the Closing (“Closing Liquid Assets”) and Parent’s estimated balance sheet liabilities as of the Closing (“Closing Balance Sheet Liabilities”) including, without limitation, an individual estimated accrual for each of the paid and unpaid expenses and accruals listed in paragraph (a) above, prepared from the books and records of the Parent and its subsidiaries in accordance with GAAP, applied on a consolidated basis consistent with Parent’s audited consolidated balance sheet for the fiscal year ended October 31, 2006. The difference between Closing Liquid Assets and Closing Balance Sheet Liabilities, plus (1) 50% of all Parent Transaction Expenses paid or payable by Parent (with a maximum increase of $150,0...
