ASSETS IN A MANNER REQUIRED BY SECTION 338 OF
THE CODE.
WITHIN 60 DAYS AFTER THE CLOSING DATE, PURCHASER WILL PROVIDE TO
VENDOR COPIES OF IRS FORM 8883 AND ANY REQUIRED EXHIBITS THERETO (THE "ASSET
ACQUISITION STATEMENT") WITH PURCHASER'S PROPOSED ALLOCATION OF THE PURCHASE
PRICE (TOGETHER WITH ANY ASSUMABLE LIABILITIES).
WITHIN 15 DAYS AFTER THE
RECEIPT OF THAT ASSET ACQUISITION STATEMENT, VENDOR WILL PROPOSE TO PURCHASER
ANY CHANGES IN THAT ASSET ACQUISITION STATEMENT.
IF NO SUCH CHANGES ARE
PROPOSED IN WRITING TO PURCHASER, VENDOR SHALL BE DEEMED TO HAVE AGREED TO, AND
ACCEPTED THE ASSET ACQUISITION STATEMENT).
PURCHASER AND VENDOR WILL ENDEAVOUR
IN GOOD FAITH TO RESOLVE ANY DIFFERENCES WITH RESPECT TO THE ASSET ACQUISITION
STATEMENT WITHIN 15 DAYS AFTER PURCHASER'S RECEIPT OF WRITTEN NOTICE OF
OBJECTION FROM VENDOR.
SHOULD THE PARTIES FAIL TO REACH AN AGREEMENT AS
REQUIRED UNDER THIS SECTION 11.4(B) THE PARTIES FURTHER AGREE TO ENGAGE, AS A
SHARED EXPENSE, THE ACCOUNTING FIRM TO RESOLVE THE ISSUE.
(C)
PROVIDED THAT PURCHASER MAKES A SECTION 338 ELECTION, VENDOR WILL,
AT THE REQUEST OF PURCHASER, COOPERATE WITH PURCHASER TO CAUSE ELECTIONS UNDER
SECTION 754 OF THE CODE TO BE IN EFFECT ON THE CLOSING DATE WITH RESPECT TO ANY
ENTITY:
(I)
IN WHICH THE CORPORATION OR ITS SUBSIDIARIES HOLDS AN INTEREST;
AND
(II)
THAT IS TREATED AS A PARTNERSHIP FOR UNITED STATES FEDERAL INCOME
TAX PURPOSES.
Any increase or decrease in the adjusted basis of the property of any such
partnership resulting from the section 338 election shall be allocated among the
assets of the partnership in a manner required by section 755 of the Code and
agreed on by the Parties under procedures consistent with those described in
Section 11.4(b).
(D)
IF PURCHASER DOES NOT MAKE A SECTION 338 ELECTION, PURCHASER SHALL
CAUSE THE CORPORATION NOT TO MAKE ANY DISTRIBUTIONS THAT WOULD REDUCE THE AMOUNT
VENDOR MUST INCLUDE IN INCOME AS A DIVIDEND UNDER SECTION 964(E) OF THE CODE
WITH RESPECT TO THE PURCHASE.
(E)
PROVIDED THAT PURCHASER MAKES A SECTION 338 ELECTION AND, EXCEPT
AS PROVIDED BELOW, PURCHASER SHALL PAY TO VENDOR THE EXCESS, IF ANY (THE TOTAL
EXCESS BEING THE "UNUSED TAX CREDITS"), OF:
(I)
THE DEEMED PAID CREDIT THAT WOULD HAVE BEEN ALLOWED BY SECTION
960 OF THE CODE TO VENDOR'S UNITED STATES SHAREHOLDERS (AS DEFINED IN SECTION
951(B) OF THE CODE) AS A RESULT OF VENDOR'S SALE OF THE PURCHASED SHARES TO
PURCHASER, IF THE LIMITATIONS OF SECTIONS 904 AND 907 OF THE CODE WERE APPLIED
WITHOUT REGARD TO THE SECTION 338 ELECTION; LESS
(II)
THE DEEMED PAID CREDIT ACTUALLY ALLOWED BY SECTION 960 OF THE
CODE (SUBJECT TO THE LIMITATIONS OF SECTIONS 904 AND 907 OF THE CODE) TO
VENDOR'S UNITED STATES SHAREHOLDERS AS A RESULT OF VENDOR'S SALE OF THE
PURCHASED SHARES TO SELLER, AFTER A FINAL DETERMINATION BY THE APPROPRIATE
GOVERNMENTAL AUTHORITY.
The payment for the Unused Tax Credits shall be made within 30 days after the
final determination by the appropriate Governmental Authority and shall include
any
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penalties