ACCORDANCE WITH THE PRECEDING SENTENCE PRIOR TO ITS FILING.
IN THE EVENT OF ANY
DISAGREEMENT BETWEEN THE PURCHASER AND THE SHAREHOLDERS REGARDING ITEMS SET
FORTH ON THE TAX RETURNS DESCRIBED IN THIS SECTION 12.3.1, THE PURCHASER AND THE
SHAREHOLDERS SHALL, IN GOOD FAITH, USE THEIR BEST EFFORTS TO AGREE ON SUCH
ITEMS.
12.3.2
THE PURCHASER SHALL PREPARE (OR CAUSE TO BE PREPARED) ALL OTHER TAX
RETURNS OF THE CORPORATION THAT ARE REQUIRED TO BE FILED AFTER THE CLOSING DATE;
AND THE PURCHASER SHALL THEREAFTER CAUSE ALL SUCH TAX RETURNS THAT HAVE BEEN
PREPARED (OR CAUSED TO BE PREPARED) BY THE SHAREHOLDERS OR THE PURCHASER TO BE
FILED BY THE CORPORATION.
12.4
Audits and Other Proceedings.
12.4.1
FOLLOWING THE CLOSING DATE, IF AN AUDIT OR OTHER ADMINISTRATIVE OR
LEGAL PROCEEDING IS INITIATED BY ANY TAXING AUTHORITY WITH RESPECT TO TAX
RETURNS OF THE CORPORATION FOR ANY TAXABLE PERIOD THAT ENDS ON OR PRIOR TO THE
CLOSING DATE OR WITH RESPECT TO TAXES OF THE CORPORATION FOR WHICH SHAREHOLDERS
WOULD BE LIABLE PURSUANT TO SECTION 8.1 (A "SHAREHOLDER CONTROLLED PROCEEDING"),
THE PURCHASER, AS THE CASE MAY BE, SHALL NOTIFY THE SHAREHOLDERS IN WRITING OF
SUCH AUDIT OR PROCEEDING.
FAILURE TO GIVE SUCH NOTICE SHALL NOT RELIEVE THE
SHAREHOLDERS FROM ANY INDEMNIFICATION OBLIGATION WHICH THEY WOULD HAVE WITH
RESPECT TO SECTION 8.1, EXCEPT TO THE EXTENT THAT THE SHAREHOLDERS ARE ACTUALLY
AND MATERIALLY PREJUDICED THEREBY.
THE SHAREHOLDERS WILL HAVE THE RIGHT, AT
THEIR OPTION, TO CONTROL THE CONDUCT OF ALL STAGES OF ANY SHAREHOLDER CONTROLLED
PROCEEDING OF WHICH IT HAS RECEIVED SUCH NOTICE WITH REPRESENTATIVES OF ITS OWN
CHOOSING, PROVIDED, HOWEVER, THE SHAREHOLDERS SHALL ALLOW THE CORPORATION AND
ITS
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COUNSEL TO PARTICIPATE IN ANY AUDIT OR OTHER ADMINISTRATIVE OR JUDICIAL
PROCEEDING TO THE EXTENT THAT SUCH AUDIT OR PROCEEDING RELATES TO TAXES OF THE
CORPORATION.
AT SUCH TIME AS SUCH REQUEST IS RECEIVED BY THE PURCHASER, THE
PURCHASER SHALL FURNISH THE SHAREHOLDERS WITH POWERS OF ATTORNEY OR ANY OTHER
DOCUMENTATION OR AUTHORIZATION NECESSARY OR APPROPRIATE TO ENABLE THE
SHAREHOLDERS TO CONTROL THE CONDUCT OF SUCH AUDIT OR OTHER PROCEEDING.
THE
PURCHASER SHALL CONTROL THE CONDUCT OF ALL STAGES OF ALL OTHER AUDITS OR OTHER
ADMINISTRATIVE OR JUDICIAL PROCEEDINGS WITH RESPECT TO TAXES OF THE
CORPORATION.
THE PURCHASER SHALL NOT, AND SHALL NOT PERMIT ANY OF THEIR
AFFILIATES (INCLUDING THE CORPORATION) TO, ACCEPT ANY PROPOSED ADJUSTMENT OR
ENTER INTO ANY SETTLEMENT OR AGREEMENT IN COMPROMISE REGARDING ANY TAXES OF THE
CORPORATION FOR WHICH THE SHAREHOLDERS WOULD HAVE AN INDEMNIFICATION OBLIGATION
UNDER SECTION 8.1 WITHOUT THE EXPRESS WRITTEN CONSENT OF THE SHAREHOLDERS.
12.4.2
WITH RESPECT TO ANY AUDIT OR OTHER ADMINISTRATIVE OR LEGAL PROCEEDING
THAT THE SHAREHOLDERS CONTROL, THE SHAREHOLDERS; (I) SHALL GIVE PROMPT NOTICE TO
PURCHASER OF ANY TAX ADJUSTMENT PROPOSED IN WRITING WITH RESPECT TO THE ASSETS
OR ACTIVITIES OF THE CORPORATION; AND (II) SHALL NOT ACCEPT ANY PROPOSED
ADJUSTMENT OR ENTER INTO ANY SETTLEMENT OR AGREEMENT IN COMPROMISE WHICH WOULD
BIND THE PURCHASER OR THE CORPORATION WITH RESPECT TO ANY