AGREE THAT THE COURT MAKING THE DETERMINATION OF
INVALIDITY OR UNENFORCEABILITY SHALL HAVE THE POWER TO REDUCE THE SCOPE,
DURATION, OR AREA OF THE TERM OR PROVISION, TO DELETE SPECIFIC WORDS OR PHRASES,
OR TO REPLACE ANY INVALID OR UNENFORCEABLE TERM OR PROVISION WITH A TERM OR
PROVISION THAT IS VALID AND ENFORCEABLE AND THAT COMES CLOSEST TO EXPRESSING THE
INTENTION OF THE INVALID OR UNENFORCEABLE TERM OR PROVISION, AND THIS AGREEMENT
SHALL BE ENFORCEABLE AS SO MODIFIED AFTER THE EXPIRATION OF THE TIME WITHIN
WHICH THE JUDGMENT MAY BE APPEALED.
6.5
CONSULTING PAYMENT.
THE PARTIES COVENANT AND AGREE THAT, WITH
RESPECT TO ANY EARN-OUT PAYMENTS, PRIOR TO MAKING ANY DISTRIBUTIONS IN
ACCORDANCE WITH THE EARN-OUT ALLOCATIONS, BUYER SHALL PAY THE FIRST 2.5% OF ANY
SUCH EARN-OUT PAYMENT TO ZAN DESIGN & ASSOCIATES IN CONSIDERATION FOR CONSULTING
SERVICES PERFORMED BY ZAN DESIGN & ASSOCIATES.
THEREAFTER, THE REMAINDER WILL
BE DISTRIBUTED IN ACCORDANCE WITH THE EARN-OUT ALLOCATIONS AS SPECIFIED IN
SECTION 2.7(B).
6.6
RESPONSIBILITY FOR FILING TAX RETURNS AND PAYMENT OF TAXES.
(A)
SELLERS SHALL PREPARE OR CAUSE TO BE PREPARED AND FILE OR CAUSE TO
BE FILED ALL TAX RETURNS FOR TARGET THAT INCLUDE ANY PRE-CLOSING TAX PERIOD OR
PORTION THEREOF, WHETHER FILED BEFORE OR AFTER THE CLOSING DATE. THE COSTS OF
PREPARATION FOR ANY TAX RETURNS OF TARGET THAT INCLUDE ANY PORTION OF THE
PRE-CLOSING TAX PERIOD SHALL BE PAID BY SELLERS.
(B)
SELLERS SHOULD PAY ALL TAXES OF TARGET WHICH ARE OR BECOME DUE AND
OWING FOR THE PRE-CLOSING TAX PERIOD, EXCEPT SUCH TAXES AS ARE REFLECTED IN THE
CLOSING DATE BALANCE SHEET.
IN THE CASE OF ANY TAXABLE PERIOD THAT INCLUDES
(BUT DOES NOT END ON) THE CLOSING DATE (A "STRADDLE PERIOD"), THE AMOUNT OF ANY
TAXES BASED ON OR MEASURED BY INCOME OR RECEIPTS OF TARGET FOR THE PRE-CLOSING
TAX PERIOD SHALL BE DETERMINED BASED ON AN INTERIM CLOSING OF THE BOOKS AS OF
THE CLOSE OF BUSINESS
ON THE CLOSING DATE (AND FOR SUCH PURPOSE, THE TAXABLE
PERIOD OF ANY PARTNERSHIP OR OTHER PASS-THROUGH ENTITY IN WHICH TARGET HOLDS A
BENEFICIAL INTEREST SHALL BE DEEMED TO TERMINATE AT SUCH TIME) AND THE AMOUNT OF
OTHER TAXES OF TARGET FOR A STRADDLE PERIOD THAT RELATES TO
33
THE PRE-CLOSING TAX PERIOD SHALL BE DEEMED TO BE THE AMOUNT OF SUCH TAX FOR THE
ENTIRE TAXABLE PERIOD MULTIPLIED BY A FRACTION THE NUMERATOR OF WHICH IS THE
NUMBER OF DAYS IN THE TAXABLE PERIOD ENDING ON THE CLOSING DATE AND THE
DENOMINATOR OF WHICH IS THE NUMBER OF DAYS IN SUCH STRADDLE PERIOD.
(C)
ALL TRANSFER, DOCUMENTARY, USE, STAMP, REGISTRATION AND OTHER SUCH
TAXES, AND ALL CONVEYANCE FEES, RECORDING CHARGES AND OTHER FEES AND CHARGES
(INCLUDING ANY PENALTIES AND INTEREST) INCURRED IN CONNECTION WITH CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE PAID BY SELLERS WHEN
DUE, AND SELLERS WILL, AT THEIR OWN EXPENSE, FILE ALL NECESSARY TAX RETURNS AND
OTHER DOCUMENTATION WITH RESPECT TO ALL SUCH TAXES, FEES AND CHARGES.
NOTWITHSTANDING THE FOREGOING,