IN THE CASE OF ALL TAXES BASED ON
OR IN RESPECT OF INCOME, THE TAX COMPUTED ON THE BASIS OF THE TAXABLE INCOME OR
LOSS OF THE ENTITY FOR SUCH PARTIAL PERIOD ENDING ON OR BEFORE THE DATE OF
CLOSING AS DETERMINED FROM ITS BOOKS AND RECORDS, AND (II) IN THE CASE OF ALL
OTHER TAXES (OTHER THAN THOSE ALLOCATED PURSUANT TO SECTION 4.4.1(II)), ON THE
BASIS OF THE ACTUAL ACTIVITIES OF THE ENTITY FOR SUCH PARTIAL PERIOD ENDING ON
OR BEFORE THE DATE OF CLOSING AS DETERMINED FROM ITS BOOKS AND RECORDS. EXCEPT
FOR TAXES ON INCOME ARISING FROM OPERATIONS IN THE ORDINARY COURSE OF BUSINESS
ON THE CLOSING DATE, SELLER SHALL NOT BE RESPONSIBLE FOR ANY TAXES ATTRIBUTABLE
TO INCOME, ACTION OR ACTIVITY ON THE CLOSING DATE AND ON OR AFTER THE CLOSING.
THE INDEMNITY UNDER THIS SECTION 5.7.1 IS SUBJECT TO THE LIMITATIONS AND OTHER
PROVISIONS OF SECTION 5.5 OF THIS AGREEMENT (WHICH FOR THE AVOIDANCE OF DOUBT
THE PARTIES ACKNOWLEDGE INCLUDE THE SURVIVAL PERIOD, PROCEDURAL REQUIREMENTS,
DEDUCTIBLE AND MAXIMUM LIABILITY PROVISIONS THEREIN), EXCEPT THAT: (I) THE
INDEMNITY UNDER THIS SECTION 5.7.1 IS NOT SUBJECT TO SECTION 5.5.2(III)(Z), AND
(II) THE DEDUCTIBLE DOES NOT APPLY TO ACCRUED BUT UNPAID TAXES OF THE
TRANSFERRED COMPANIES, THE PROPERTY MANAGERS OR ILLINOIS MANAGER FOR THEIR
RESPECTIVE TAXABLE PERIODS WHICH INCLUDE THE CLOSING. WITH RESPECT TO CLAUSE
(II) OF THE PRECEDING SENTENCE: (A) SUCH ACCRUED BUT UNPAID TAXES SHALL NOT BE
TAKEN INTO ACCOUNT WHEN DETERMINING WHETHER THE DEDUCTIBLE THRESHOLD HAS BEEN
MET UNDER SECTION 5.5.3 WITH RESPECT TO ANY OTHER CLAIMS; AND (B) ANY TAX
REFUNDS THAT ARE RECEIVED BY A TRANSFERRED COMPANY, A PROPERTY MANAGER OR
ILLINOIS MANAGER, AND ANY AMOUNTS CREDITED AGAINST TAX TO WHICH A TRANSFERRED
COMPANY, A PROPERTY MANAGER OR ILLINOIS MANAGER BECOMES ENTITLED, THAT RELATE TO
TAX PERIODS OR PORTIONS THEREOF ENDING ON OR BEFORE THE DATE OF THE CLOSING
SHALL BE FOR THE ACCOUNT OF SELLER, AND PURCHASER SHALL PAY OVER TO SELLER ANY
SUCH REFUND OR THE AMOUNT OF ANY SUCH CREDIT WITHIN 15 DAYS AFTER RECEIPT OR
ENTITLEMENT THERETO.
5.7.2
SELLER SHALL PREPARE OR CAUSE TO BE PREPARED, AT THE COST AND EXPENSE
OF SELLER, ON A TIMELY BASIS (INCLUDING ANY AUTOMATICALLY AVAILABLE EXTENSIONS)
TAX RETURNS FOR THE TRANSFERRED COMPANIES AND THE PROPERTY MANAGERS (INCLUDING
THE APPLICABLE 1099S, K-1S OR SIMILAR SCHEDULES AND REPORTS WHICH ARE PART OF OR
DERIVED FROM ANY SUCH TAX RETURNS) FOR FEDERAL AND STATE INCOME, UNINCORPORATED
BUSINESS TAXABLE INCOME OR ANY SIMILAR TYPE OF NET INCOME TAX APPLICABLE TO ANY
SAID ENTITY FOR ALL SUCH TAX RETURNS (I)
WHICH ARE DUE PRIOR TO THE CLOSING,
(II) WHICH RELATE TO TAXABLE OR OTHER RELEVANT PERIODS ENDING BEFORE JANUARY 1,
2007 OR (III) WHICH ARE FOR A TAXABLE PERIOD BEGINNING JANUARY 1, 2007.
ALL SUCH TAX RETURNS, AND ANY TAX RETURNS PREPARED PURSUANT TO SECTION 5.7.2,
SHALL IN ALL EVENTS BE PREPARED IN A MANNER CONSISTENT WITH THE PRIOR TAX
RETURNS AS TO ALL CONTINUING ELECTIONS, CHARACTERIZATIONS AND OTHER