ACTION OR CLAIM BASED ON FRAUD OR
WILLFUL MISREPRESENTATION, (III) ANY REMEDY UNDER SECTION 7.6, OR (IV) ANY OTHER
REMEDY OF SPECIFIC PERFORMANCE OTHERWISE AVAILABLE TO ANY PARTY HEREUNDER OR
UNDER APPLICABLE LAWS.
ARTICLE 7
ADDITIONAL AGREEMENTS
7.1
TAX MATTERS.
(A)
TRANSFER TAXES.
ALL TRANSFER, DOCUMENTARY, USE, STAMP, REGISTRATION,
SALES AND OTHER SUCH TAXES AND FEES (INCLUDING ANY PENALTIES AND INTEREST
THEREON) INCURRED IN CONNECTION WITH THIS AGREEMENT SHALL BE PAID BY THE COMPANY
WHEN DUE, AND THE COMPANY SHALL, AT ITS OWN
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EXPENSE, FILE ALL NECESSARY TAX RETURNS AND OTHER DOCUMENTATION WITH RESPECT TO
ALL SUCH TRANSFER, DOCUMENTARY, USE, STAMP, REGISTRATION, SALES AND OTHER TAXES
AND FEES, AND IF REQUIRED BY APPLICABLE LAW, BUYER SHALL, AND SHALL CAUSE ITS
AFFILIATES TO, JOIN IN THE EXECUTION OF ANY SUCH TAX RETURNS AND OTHER
DOCUMENTATION.
(B)
ALLOCATION.
BUYER AND THE COMPANY SHALL JOINTLY ALLOCATE THE PURCHASE
PRICE IN ACCORDANCE WITH SECTION 1060 OF THE CODE (THE "ALLOCATION") AMONG THE
PURCHASED ASSETS USING THE METHODOLOGY AND ALLOCATION AMOUNTS SET FORTH ON THE
SCHEDULE 7.1(B) ATTACHED HERETO.
THE ALLOCATION WILL BE GENERALLY CONSISTENT
WITH THE LETTER OF INTENT.
FIXED ASSETS WILL BE VALUED AT THEIR APPRAISED
VALUES, INVENTORY WILL BE VALUED AT FAIR MARKET VALUE (WHICH IS ASSUMED TO
APPROXIMATE THE CURRENT COST, NOT THE LIFO VALUE), AND ANY EXCESS PURCHASE PRICE
ALLOCATION WILL BE APPLIED TO GOODWILL.
FOR PURPOSES OF THE ALLOCATION, THE
PURCHASE PRICE SHALL INCLUDE ASSUMED LIABILITIES FOR U.S. FEDERAL INCOME TAX
PURPOSES.
TO THE EXTENT THAT THE PURCHASE PRICE IS ADJUSTED AFTER THE CLOSING
DATE PURSUANT TO SECTION 2.7, BUYER AND THE COMPANY AGREE TO REVISE AND AMEND
THE ALLOCATION IN ACCORDANCE WITH THE CHARACTER OF EACH SUCH ADJUSTMENT,
CONSISTENT WITH THE METHODOLOGY SET FORTH ON SCHEDULE 7.1(B).
THE COMPANY AND
BUYER AGREE TO PREPARE AND FILE AN IRS FORM 8594 OR SUCH OTHER FORM OR STATEMENT
AS MAY BE REQUIRED BY APPLICABLE LAW, RULE OR REGULATION, AND ANY COMPARABLE
STATE OR LOCAL INCOME TAX FORM, IN A MANNER CONSISTENT WITH THE ALLOCATION.
THE
COMPANY AND BUYER SHALL ADHERE TO THE ALLOCATION FOR ALL TAX-RELATED PURPOSES
INCLUDING ANY FEDERAL, FOREIGN, STATE, COUNTY OR LOCAL INCOME AND FRANCHISE TAX
RETURN FILED BY THEM AFTER THE CLOSING DATE, INCLUDING THE DETERMINATION BY THE
COMPANY OF TAXABLE GAIN OR LOSS ON THE SALE OF THE PURCHASED ASSETS AND THE
DETERMINATION BY BUYER OF ITS TAX BASIS WITH RESPECT TO THE PURCHASED ASSETS.
NEITHER BUYER NOR THE COMPANY SHALL FILE ANY TAX RETURNS OR, IN A JUDICIAL OR
ADMINISTRATIVE PROCEEDING, ASSERT OR MAINTAIN ANY TAX REPORTING POSITION THAT IS
INCONSISTENT WITH THIS AGREEMENT OR THE ALLOCATION AGREED TO IN ACCORDANCE WITH
THIS AGREEMENT, UNLESS REQUIRED TO DO SO BY APPLICABLE LAW.
(C)
THE PARTIES HERETO AGREE THAT THE PURCHASE PRICE AND THE ASSUMED
LIABILITIES WILL BE ALLOCATED TO THE PURCHASED ASSETS FOR ALL PURPOSES
(INCLUDING TAX AND FINANCIAL ACCOUNTING PURPOSES) IN A MANNER CONSISTENT WITH
THE FAIR MARKET VALUES AS REASONABLY DETERMINED AND DESCRIBED ABOVE IN
SECTION 7.1(B) BY BUYER AND