Common use of Current Assets and Liabilities Clause in Contracts

Current Assets and Liabilities. Section 5.12.1 At least five days prior to the Effective Time, Parent shall have audited the Company’s and Parallax’s unconsolidated balance sheets as of August 31, 2003 according to GAAP (the “Audited Balance Sheets”). The amount of current assets minus current liabilities shown on the Audited Balance Sheet of Parallax (in each case, ignoring all intercompany accounts) is referred to herein as the “Base Working Capital Amount.” The Company and Parallax shall cooperate and assist Parent and its auditors in connection with such audit. Parent shall provide the Company with access to the audit work papers related to such computations. Section 5.12.2 Not later than two business days prior to the Effective Time, the Company shall provide to Parent a certificate executed by two executive officers of the Company stating a reasonable good faith estimate in accordance with GAAP consistently applied in the preparation of the Audited Balance Sheet of Parallax as of the proposed Effective Time of Parallax’s current assets minus current liabilities (in each case, ignoring all intercompany accounts), which is referred to herein as the “Estimated Working Capital Amount.” The Company and Parallax shall provide Parent with access to the audit work papers related to such computations in providing the Estimated Working Capital Amount. Section 5.12.3 Not later than two business days prior to the Effective Time, the Company shall provide to Parent a certificate executed by two executive officers of the Company stating a reasonable good faith estimate of the liabilities and obligations of the Company on an unconsolidated basis (whether accrued, absolute, contingent or otherwise) (ignoring all intercompany accounts) (including as liabilities of the Company all estimated amounts relating to any financial advisor, legal, accounting, and any other transaction fees, as well as any other liabilities or obligations (including, without limitation, parachute payments and severance payments) that arise out of or result from the transactions contemplated by this Agreement (but not paid in cash prior to the Effective Time) (the “Estimated MDA Liabilities”). Section 5.12.4 Not later than two business days prior to the Effective Time, the Company shall provide to Parent a certificate executed by two executive officers of the Company stating a reasonable good faith estimate in accordance with GAAP consistently applied in the preparation of the Audited Balance Sheet of the Company as of the proposed Effective Time of (a) the cash and Cash Equivalents of the Company (on an unconsolidated basis), less (b) all liabilities or obligations of the Company on an unconsolidated basis relating to any financial advisor, legal, accounting, and any other transaction fees, as well as any other liabilities or obligations (including, without limitation, parachute payments and severance payments) that arise out of or result from the transactions contemplated by this Agreement (but not paid in cash prior to the Effective Time), less (c) all accrued dividends owed to the holders of the Company Series B Preferred Stock on or prior to the Closing Date (but not paid in cash prior to the Closing Date) (in each case, ignoring all intercompany accounts) (the “Estimated Cash Amount”). The Company shall provide Parent with access to the audit work papers related to such computations in providing the Estimated Cash Amount. Section 5.12.5 As of the Effective Time, Parallax shall have no current liabilities relating to any financial advisor, legal, accounting, and any other transaction fees, or any other liabilities or obligations (including, without limitation, parachute payments and severance payments) that arise out of or result from the transactions contemplated by this Agreement or otherwise. Section 5.12.6 As of the Effective Time, no Company Subsidiary other than Parallax shall have any operations, any assets or liabilities or any nature on an unconsolidated basis.