NOTICE OF ANY PENDING, PROPOSED, THREATENED
OR ACTUAL TAX AUDIT OR TAX DEFICIENCY, ASSESSMENT OR OTHER CLAIM WHICH MAY
AFFECT THE TAXES FOR ANY STRADDLE PERIOD FOR WHICH BUYER WOULD BE LIABLE
PURSUANT TO SECTION 9.1(B). SELLER SHALL HAVE THE SOLE RIGHT TO CONTROL THE
DEFENSE IN ANY TAX AUDIT OR ADMINISTRATIVE OR COURT PROCEEDING (A "TAX CONTEST")
RELATING TO ANY PRE-CLOSING PERIOD OF THE COMPANY AND TO EMPLOY COUNSEL AND
OTHER ADVISORS OF ITS CHOICE AT ITS EXPENSE.
In the event of any Tax Contest relating to a Straddle Period of the Company,
(i) to the extent the issues can be separated into those for which Seller would
be liable under Section 9.1(a) and those for which Buyer would be liable under
Section 9.1(b), then each of Seller and Buyer shall control the defense of those
issues for which it would be liable, employing counsel and other advisors of its
own choice, at its expense, (ii) with respect to all other issues, Buyer shall
be entitled to control the defense employing counsel and other advisors of its
choice at its expense, provided that Seller (along with counsel and other
advisors of its choice) shall be entitled to participate in the defense of and
to take over such defense if Buyer is not prosecuting the defense diligently,
vigorously and professionally. Neither Buyer nor the Company may agree to settle
any Tax claim which may affect the Taxes for which Seller would be liable under
Section 9.1(a) without the prior written consent of Seller, which consent shall
not be unreasonably withheld.
SECTION 9.2
TRANSFER TAXES. ANY TRANSFER TAXES ARISING FROM THE SALE
OF THE MEMBERSHIP INTERESTS SHALL BE BORNE BY BUYER.
SECTION 9.3
ALLOCATION OF PURCHASE PRICE. BUYER AND SELLER
ACKNOWLEDGE THAT FOR U.S. FEDERAL INCOME TAX PURPOSE AND CERTAIN STATE INCOME
TAX PURPOSES, THE PURCHASE OF THE COMPANY WILL BE TREATED AS THE PURCHASE OF
ASSETS AND THE ASSUMPTION OF LIABILITIES BY THE BUYER. BUYER AND SELLER AGREE TO
DETERMINE THE TOTAL AMOUNT OF THE CONSIDERATION FOR SUCH PURCHASE (WHICH SHALL
INCLUDE THE PURCHASE PRICE, ALL ADJUSTMENTS THERETO AND THE AMOUNT OF THE
LIABILITIES OF THE COMPANY TREATED AS ASSUMED BY THE BUYER FOR TAX PURPOSES) AND
TO ALLOCATE SUCH CONSIDERATION AMONG THE ASSETS OF THE COMPANY FOR ALL TAX
PURPOSES IN ACCORDANCE WITH THE RULES UNDER SECTION 1060 OF THE CODE. PRIOR TO
CLOSING, SELLER WILL PREPARE AND PROVIDER TO BUYER A PRELIMINARY ALLOCATION
SCHEDULE SETTING FORTH THE ESTIMATED AMOUNT OF THE CONSIDERATION AND ITS
ALLOCATION, AND SUCH SCHEDULE SHALL BE FINALIZED AND AGREED TO AFTER THE
PURCHASE PRICE IS DETERMINED.
SELLER AND BUYER AGREE TO FILE IRS FORMS 8594
REPORTING SUCH DETERMINATION AND ALLOCATION AND TO FOLLOW SUCH DETERMINATION AND
ALLOCATION FOR ALL TAX REPORTING PURPOSES. IF THE TOTAL CONSIDERATION IS
ADJUSTED AFTER THE FINAL ALLOCATION SCHEDULE HAS BEEN PREPARED AND AGREED TO,
SELLER WILL PREPARE AND PROVIDE TO BUYER A REVISED ALLOCATION SCHEDULE AND BUYER
AND SELLER WILL FILE AMENDED IRS FORMS 8594 REFLECTING THE REVISED ALLOCATION