Tax Note Payable to Sellers. At the closing, Buyer shall execute a --------------------------- promissory note in favor of Sellers in the form of Exhibit 4.01(c) in the amount of $82,323, bearing interest at the prime rate as adjusted from time to time as further provided in the note, and payable over a term of six years from and after the date of closing, all as further provided in the form of the note attached hereto as Exhibit 4.01(c) (the "Tax Note"). The Tax Note shall be secured by a collateral assignment of the Purge Patent and LTHP Patent at closing; provided, however, the rights of the holder of the Tax Note pursuant to such collateral assignment of the Purge Patent and LTHP Patent and escrow of documents in connection therewith shall be subordinated to the rights the holders of the Promissory Note with respect to the collateral assignment of the Purge Patent and LTHP Patent executed and escrow of documents in connection therewith established in their favor. The Tax Note is being executed by Buyer in favor of Sellers with respect to certain payroll tax obligations Controls failed to pay to Systems prior to this date, and Controls shall provide documentation to Buyer prior to closing to establish that the proposed amount of the Tax Note directly related to payroll taxes and withholding taxes on Controls' employees that were not paid to the Internal Revenue Service. In no event shall the amount of the Tax Note be increased. However, if such documentation shows that the amount of the payroll tax liability attributable to Controls' employees is less than the amount indicated above as being the original principal amount of the Tax Note, the principal amount of the Tax Note shall be reduced accordingly. Buyer and Sellers further agree that in the event Sellers fail to issue shares of Turbotak/Sonic stock to Buyer upon confirmation of the Plan of Reorganization (as hereinafter defined) or on or before twelve months after the closing date, whichever first occurs, as hereinafter provided in Section 10.06, the amount payable by Buyer pursuant to the Tax Note shall be reduced by the amount of $41,162 from the principal amount otherwise to be paid and Buyer shall further be given credit for all interest paid by Buyer on the original balance of the Tax Note prior to adjustment in excess of the interest that would have been paid by Buyer had the principal balance been reduced retroactively as of the closing date, and the balance due from Buyer under the Tax Note shall be reduced accordingl...
