Additional Amounts Payable. The Obligor shall pay the following amounts to the following persons, all as “Additional Payments” under this Loan Agreement: (a) If at any time that the Bonds are outstanding an Event of Taxability occurs, the Obligor shall within thirty (30) days of the date of the Event of Taxability (i) pay to the Trustee for deposit in the Bond Fund one hundred percent (100%) of the unpaid installments owing on the Note pursuant to this Loan Agreement plus accrued interest to the date of redemption of the Bonds in accordance with Article III of the Indenture, or (ii) commence payment of interest on the Note at the Taxable Rate. Provided, however, that this subsection (a) shall be applicable only as to a Bondowner or Bondowners with respect to whom an Event of Taxability has occurred and only after the Obligor shall have had the opportunity to exercise applicable rights of contest, if any, granted to it pursuant to Section 3.4(c). (b) Within thirty days after the occurrence of an Event of Taxability, whether such Event of Taxability occurs before or after payment of the Bonds, the Obligor shall pay: (i) to the Trustee for deposit in the Bond Fund the amount equal to the difference between the sum necessary to yield an interest rate on the unpaid principal balance of any Bond as to which an Event of Taxability has occurred, from the Date of Taxability until the date on which the Issuer commences paying interest at the Taxable Rate, equal to the Taxable Rate less the amount of interest actually paid on the Bonds from the Date of Taxability to the date the Obligor commences paying interest at the Taxable Rate; plus (ii) to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to the amount of any Additions to Tax, which are payable by such Bondowners to the United States or any state or local government as a consequence of the failure to include the interest or any amount in respect of interest on the Bond in the Federal Gross Income of such Bondowners and which are deductible by such Bondowners for Federal income tax purposes; plus (iii) to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to the amount of any Additions to Tax which are payable by such Bondowners to the United States or any state or local government after payment of all Federal, state or local taxes required to be paid by such Bondowners in respect of the receipt thereof, as a consequence of the failure to include the interest or any amount in respect of interest on the Bond and which are not deductible by such Bondowners for Federal income tax purposes plus all Federal, state or local taxes required to be paid by such Bondowners with respect to the sums received pursuant to this subsection (iii); plus (iv) to the Trustee, to the owners and former owners of the Bond and to the Issuer, as the case may be, an amount which is sufficient to reimburse them for all reasonable costs, fees and expenses accrued or to accrue as a result of the occurrence of an Event of Taxability. (i) Not later than twenty (20) days after receipt by a Bondowner of a written revenue agent’s report asserting a deficiency against such Bondowner or otherwise setting forth a finding that interest on the Bonds is not excludable from such Bondowner’s gross income for Federal income tax purposes, such Bondowner shall notify the Obligor of such event and shall furnish the Obligor with a copy of the relevant portions of such written report; provided, that a failure by a Bondowner to comply with the requirement of this paragraph (c), except in the case of a willful failure, shall not in any way adversely affect the Bondowner’s right to the additional payments set forth in Section 3.4(b) hereof. Thereafter, the Bondowner shall afford the Obligor an opportunity to discuss such finding with the Internal Revenue Service and to make any written submission to the Internal Revenue Service which the Obligor deems desirable, and the Bondowner shall use its best efforts to facilitate such discussions and written submissions; provided, that if the Bondowner shall, in good faith and in its sole discretion, determine that the commencement or continuance of any such discussions or submissions by the Obligor would extend the audit and review of the Bondowner’s Federal income tax return beyond the period such audit and review would require but for the commencement or continuance of such discussions or submissions, or if the Bondowner shall otherwise determine, in good faith and in its sole discretion, that, for reasons other than matters relating to the proposed inclusion in Federal gross income of interest on the Bonds, it is in the Bondowner’s interest to discontinue the audit and review of the Bondowner’s Federal income tax return, then, upon receipt of notice by the Obligor from the Bondowner to such effect, the Obligor shall have no further right to commence or continue such discussions or submissions, and the Bondowner shall have the right to cause such audit and review to be closed. (ii) If a Bondowner receives a statutory notice of deficiency relating to interest on the Bonds, and such Bondowner determines in its sole discretion not to pay the deficiency, it shall promptly notify the Obligor of its determination and shall, at the request of the Obligor, file a petition in the United States Tax Court and permit the Obligor to participate in the conduct of the proceedings before the United States Tax Court insofar as they relate to the tax treatment of interest on the Bonds. (iii) If a Bondowner receives a statutory notice of deficiency and decides, in its sole discretion, not to file a petition in the United States Tax Court, then such Bondowner, at the request of the Obligor, shall file promptly a claim for refund with respect to the tax attributable to the inclusion of interest on the Bonds in such Bondowner’s Federal Gross Income. The Obligor shall provide such Bondowner with the funds necessary to enable such Bondowner to make the claim for refund with regard to the inclusion of interest issue. If any such claim shall not be allowed by the Internal Revenue Service, such Bondowner shall, at the request of the Obligor, promptly commence a suit for refund (in a forum chosen by such Bondowner in its sole discretion) and prosecute an appeal or appeals from any adverse determination as the Obligor shall direct, and the Bondowner shall permit the Obligor to participate in the conduct of such proceedings insofar as they relate to the tax treatment of interest on the Bonds. (iv) For all purposes of this Section 3.4(c), the right of the Obligor to participate in any proceeding shall mean the right (subject to the approval of counsel for the Bondowner, which approval shall, taking into account the best interests of the Bondowner, the timeliness of any request made by the Obligor and all other relevant facts and circumstances, not be unreasonably withheld) to assist the Bondowner and its counsel in connection with the submission and content of documentation, protests, memoranda of fact and law and briefs, the conduct of oral arguments or presentations, the selection of witnesses and the negotiation of stipulations of fact, all as may be appropriate in proceedings before the Internal Revenue Service, the United States Tax Court, the Claims Court, a Federal District Court or any court of appellate jurisdiction, as the case may be. (v) As a condition precedent to the exercise by the Obligor of the rights of contest granted to it under this Section 3.4(c), the Obligor shall deliver to the Bondowner an opinion of nationally recognized bond counsel to the effect that a meritorious claim exists with respect to the exemption of interest on the Bonds from Federal Gross Income. In addition, the Obligor shall reimburse the Bondowner and hold it harmless for all costs and expenses incurred in connection with any contest, including, without limitation, the amount of all taxes and Additions to Tax with respect to the tax attributable to the inclusion of interest on the Bonds in the Bondowner’s Federal Gross Income which were paid to the United States prior to the filing of a claim for refund under Section 3.4(d) hereof, all fees and disbursements of attorneys, accountants and expert witnesses. The Bondowner may also require the Obligor to post a bond to secure adequately payment of such costs and expenses. (vi) Without limiting the rights of the Obligor to contest as hereinabove set forth and except as provided in clause (iii) above, the Bondowner shall have sole discretion to decide whether to prosecute an appeal from an adverse determination with respect to the tax treatment of interest on the Bonds at any level in any forum in which such adverse determination is made; provided, however, that in the event the Bondowner shall determine to prosecute an appeal with respect to any other issue, then the Bondowner shall, at the request of the Obligor, also prosecute an appeal with respect to such adverse determination and shall permit the Obligor to participate in the conduct of the proceedings insofar as they relate to the tax treatment of interest on the Bonds. (d) In the event that the Obligor shall make any payments to a Bondowner pursuant to Section 3.4(b) and the Bondowner shall thereafter receive a refund as a consequence of a determination that interest on the Bonds is excludable from Federal Gross Income, the Bondowner shall be obligated to pay promptly to the Obligor the amount refunded (including any interest paid) such Bondowner by the Internal Revenue Service less any costs or expenses incurred by the Bondowner with respect to any proceeding or action for which the Obligor has not yet paid the Bondowner. (e) If a Bondowner determines, in good faith after consultation with counsel, that there is a substantial likelihood for any reason whatsoever, including, without limitation, a change of law, issuance of temporary, proposed or final Treasury Regulations, issuance or revocation of an Internal Revenue Service ruling (including a private letter ruling) or a court decision, that it might be required to include all or any portion of the interest on the Bonds in its Federal Gross Income, or that the Bondowner shall be subject to any excise, preference, minimum or other type of tax because of its ownership of the Bonds or receipt of interest thereon, such Bondowner shall be entitled to request a Qualifying Opinion of Counsel with respect to interest on the Bonds for the period from the issuance of the Bonds or for any lesser period specified in the Bondowner’s request. The fees and disbursements of counsel in rendering such opinion shall be paid by the Obligor. (f) To the Trustee, when due, all fees in accordance with its fee proposal to the Obligor and charges for services rendered under the Indenture, the Collateral Documents or this Loan Agreement, and all reasonable expenses (including without limitation reasonable fees and charges of any Paying Agent, Bond Registrar, counsel, accountant, engineer or other person) incurred in the performance of the duties of the Trustee and others under the Indenture, the Collateral Documents or this Loan Agreement for which the Trustee and other persons are entitled to repayment or reimbursement; (g) To the Issuer, upon demand, its regular administrative fee, if any, and all expenses (including without limitation attorney’s fees) incurred by the Issuer in relation to the transactions contemplated by this Loan Agreement and the Indenture, which are not otherwise to be paid by the Obligor under this Loan Agreement or the Indenture, including without limitation, the obligation to pay rebatable arbitrage to the extent not paid under clause (j) of this Section; (h) To the appropriate person, all taxes, assessments and charges required to be paid by Section 5.7; (i) To the appropriate person, such payments as are required (i) as payment for or reimbursement of any and all reasonable costs, expenses and liabilities incurred by the Issuer or the Trustee or any of them in satisfaction of any obligations of the Obligor hereunder that the Obligor does not perform, or incurred in the defense of any action or proceeding with respect to the Project, this Loan Agreement, the Collateral Documents or the Note, or (ii) as reimbursement for expenses paid, or as prepayment of expenses to be paid, by the Issuer or the Trustee and that are incurred as a result of a request by the Obligor or a requirement of this Loan Agreement or the Collateral Documents and that the Obligor is not otherwise required to pay under this Loan Agreement; (j) To the Trustee, on demand, any sums owing pursuant to Section 507 of the Indenture; and (k) To the appropriate person, any other amounts required to be paid by the Obligor under this Loan Agreement, the Indenture or the Collateral Documents. Any past due Additional Payments shall continue as an obligation of the Obligor until they are paid and shall bear interest at two percent (2%) in excess of the Prime Rate during the period such Additional Payments remain unpaid.
Appears in 1 contract
Sources: Loan Agreement (Synergetics Usa Inc)
Additional Amounts Payable. The Obligor shall pay the following amounts to the following persons, all as “Additional Payments” under this Loan Agreement:
(a) If at any time that The Borrower hereby further expressly agrees to pay to the Bonds are outstanding an Event of Taxability occursAuthority or the Trustee, as applicable, as and when the Obligor same shall within thirty (30) days of the date of the Event of Taxability become due, (i) pay to the Trustee for deposit fees, including without limitation the Capital Reserve Fee and the Loan Origination Fee, and reasonable expenses of the Authority as provided in the Bond Fund one hundred percent (100%) of the unpaid installments owing on the Note pursuant to this Loan Agreement plus accrued interest to the date of redemption of the Bonds in accordance with Article III of the IndentureFinancing Documents, or (ii) commence payment of interest on the Note at the Taxable Rate. Providedreasonable fees, however, that this subsection (a) shall be applicable only as to a Bondowner or Bondowners with respect to whom an Event of Taxability has occurred charges and only after the Obligor shall have had the opportunity to exercise applicable rights of contest, if any, granted to it pursuant to Section 3.4(c).
(b) Within thirty days after the occurrence of an Event of Taxability, whether such Event of Taxability occurs before or after payment expenses of the BondsAuthority and the Trustee in connection with or arising out of or relating to the issuance and servicing of the Notes, the Obligor shall pay:
(i) to making, servicing, administration or collection of the Trustee for deposit in the Bond Fund the amount equal to the difference between the sum necessary to yield an interest rate on the unpaid principal balance Loan or exercise of any Bond as to which an Event rights or responsibilities under the Financing Documents, the Indenture or the Notes, including reasonable charges of Taxability has occurredcounsel, from the Date of Taxability until the date on which the Issuer commences paying interest at the Taxable Rate, equal to the Taxable Rate less the amount of interest actually paid on the Bonds from the Date of Taxability to the date the Obligor commences paying interest at the Taxable Rate; plus
(ii) to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to the amount of any Additions to Tax, which are payable by such Bondowners to the United States or any state or local government as a consequence of the failure to include the interest or any amount in respect of interest on the Bond in the Federal Gross Income of such Bondowners and which are deductible by such Bondowners for Federal income tax purposes; plus
(iii) to the owners reasonable fees and former owners charges of any Bond as to which an Event of Taxability has occurred, an amount equal to the amount of any Additions to Tax which are payable by such Bondowners to the United States or any state or local government after payment of all Federal, state or local taxes required to be paid by such Bondowners in respect of the receipt thereof, as a consequence of the failure to include the interest or any amount in respect of interest on the Bond and which are not deductible by such Bondowners for Federal income tax purposes plus all Federal, state or local taxes required to be paid by such Bondowners with respect to the sums received pursuant to this subsection (iii); plus
(iv) to the Trustee, to the owners and former owners of the Bond and to the Issuer, as the case may be, an amount which is sufficient to reimburse them for all reasonable costs, fees and expenses accrued or to accrue as a result of the occurrence of an Event of Taxability.
(i) Not later than twenty (20) days after receipt by a Bondowner of a written revenue agent’s report asserting a deficiency against such Bondowner or otherwise setting forth a finding that interest on the Bonds is not excludable from such Bondowner’s gross income for Federal income tax purposes, such Bondowner shall notify the Obligor of such event and shall furnish the Obligor with a copy of the relevant portions of such written report; provided, that a failure by a Bondowner to comply with the requirement of this paragraph (c), except in the case of a willful failure, shall not in any way adversely affect the Bondowner’s right to the additional payments set forth in Section 3.4(b) hereof. Thereafter, the Bondowner shall afford the Obligor an opportunity to discuss such finding with the Internal Revenue Service and to make any written submission to the Internal Revenue Service which the Obligor deems desirableAuthenticating Agent, and the Bondowner shall use its best efforts to facilitate such discussions and written submissions; providedany Paying Agent for services, that if the Bondowner shallincluding reasonable charges of counsel, in good faith and in its sole discretion, determine that the commencement rendered by it directly or continuance of any such discussions or submissions by the Obligor would extend the audit and review of the Bondowner’s Federal income tax return beyond the period such audit and review would require but for the commencement or continuance of such discussions or submissions, or if the Bondowner shall otherwise determine, in good faith and in its sole discretion, that, for reasons other than matters relating to the proposed inclusion in Federal gross income of interest on the Bonds, it is in the Bondowner’s interest to discontinue the audit and review of the Bondowner’s Federal income tax return, then, upon receipt of notice by the Obligor from the Bondowner to such effect, the Obligor shall have no further right to commence or continue such discussions or submissions, and the Bondowner shall have the right to cause such audit and review to be closed.
(ii) If a Bondowner receives a statutory notice of deficiency relating to interest on the Bonds, and such Bondowner determines in its sole discretion not to pay the deficiency, it shall promptly notify the Obligor of its determination and shall, at the request of the Obligor, file a petition in the United States Tax Court and permit the Obligor to participate in the conduct of the proceedings before the United States Tax Court insofar as they relate to the tax treatment of interest on the Bonds.
(iii) If a Bondowner receives a statutory notice of deficiency and decides, in its sole discretion, not to file a petition in the United States Tax Court, then such Bondowner, at the request of the Obligor, shall file promptly a claim for refund with respect to the tax attributable to the inclusion of interest on the Bonds in such Bondowner’s Federal Gross Income. The Obligor shall provide such Bondowner with the funds necessary to enable such Bondowner to make the claim for refund with regard to the inclusion of interest issue. If any such claim shall not be allowed by the Internal Revenue Service, such Bondowner shall, at the request of the Obligor, promptly commence a suit for refund (in a forum chosen by such Bondowner in its sole discretion) and prosecute an appeal or appeals from any adverse determination as the Obligor shall direct, and the Bondowner shall permit the Obligor to participate in the conduct of such proceedings insofar as they relate to the tax treatment of interest on the Bonds.
(iv) For all purposes of this Section 3.4(c), the right of the Obligor to participate in any proceeding shall mean the right (subject to the approval of counsel for the Bondowner, which approval shall, taking into account the best interests of the Bondowner, the timeliness of any request made by the Obligor and all other relevant facts and circumstances, not be unreasonably withheld) to assist the Bondowner and its counsel indirectly in connection with the submission and content of documentation, protests, memoranda of fact and law and briefs, Loan or the conduct of oral arguments or presentations, the selection of witnesses and the negotiation of stipulations of fact, all as may be appropriate in proceedings before the Internal Revenue Service, the United States Tax Court, the Claims Court, a Federal District Court or any court of appellate jurisdiction, as the case may be.
(v) As a condition precedent to the exercise by the Obligor of the rights of contest granted to it under this Section 3.4(c), the Obligor shall deliver to the Bondowner an opinion of nationally recognized bond counsel to the effect that a meritorious claim exists with respect to the exemption of interest on the Bonds from Federal Gross Income. In addition, the Obligor shall reimburse the Bondowner and hold it harmless for all costs and expenses incurred in connection with any contestNotes, including, without limitation, charges for services rendered as Trustee and Paying Agent on the amount Notes, and (iv) the initial fees and charges of all taxes and Additions S&P.
(b) The Borrower further hereby expressly agrees to Tax with respect pay to the tax attributable to Trustee, as and when the inclusion same shall become due, the amounts required by Section 5.04(e) of interest on the Bonds in the Bondowner’s Federal Gross Income which were paid to the United States prior to the filing of a claim for refund under Section 3.4(d) hereof, all fees and disbursements of attorneys, accountants and expert witnesses. The Bondowner may also require the Obligor to post a bond to secure adequately payment of such costs and expensesIndenture.
(vic) Without limiting The Borrower also agrees to pay all amounts payable by it under the rights of the Obligor to contest as hereinabove set forth and except as provided in clause (iii) aboveFinancing Documents, the Bondowner shall have sole discretion to decide whether to prosecute an appeal from an adverse determination with respect to the tax treatment of interest on the Bonds at any level in any forum in which such adverse determination is made; provided, however, that in the event the Bondowner shall determine to prosecute an appeal with respect to any other issue, then the Bondowner shallincluding without limitation Section 6.5 hereof, at the request of the Obligortime, also prosecute an appeal with respect to such adverse determination and shall permit the Obligor to participate in the conduct of the proceedings insofar as they relate manner and to the tax treatment party therein provided, without delay, reduction or offset of interest on the Bondsany kind or for any reason.
(d) In the event that the Obligor Borrower shall make fail to make, or cause to be made, any of the payments to a Bondowner pursuant to Section 3.4(b) and the Bondowner shall thereafter receive a refund as a consequence of a determination that interest on the Bonds is excludable from Federal Gross Incomerequired hereby, the Bondowner shall be obligated to pay promptly to the Obligor the amount refunded (including any interest paid) such Bondowner by the Internal Revenue Service less any costs unpaid item or expenses incurred by the Bondowner with respect to any proceeding or action for which the Obligor has not yet paid the Bondowner.
(e) If a Bondowner determines, in good faith after consultation with counsel, that there is a substantial likelihood for any reason whatsoever, including, without limitation, a change of law, issuance of temporary, proposed or final Treasury Regulations, issuance or revocation of an Internal Revenue Service ruling (including a private letter ruling) or a court decision, that it might be required to include all or any portion of the interest on the Bonds in its Federal Gross Income, or that the Bondowner shall be subject to any excise, preference, minimum or other type of tax because of its ownership of the Bonds or receipt of interest thereon, such Bondowner shall be entitled to request a Qualifying Opinion of Counsel with respect to interest on the Bonds for the period from the issuance of the Bonds or for any lesser period specified in the Bondowner’s request. The fees and disbursements of counsel in rendering such opinion shall be paid by the Obligor.
(f) To the Trustee, when due, all fees in accordance with its fee proposal to the Obligor and charges for services rendered under the Indenture, the Collateral Documents or this Loan Agreement, and all reasonable expenses (including without limitation reasonable fees and charges of any Paying Agent, Bond Registrar, counsel, accountant, engineer or other person) incurred in the performance of the duties of the Trustee and others under the Indenture, the Collateral Documents or this Loan Agreement for which the Trustee and other persons are entitled to repayment or reimbursement;
(g) To the Issuer, upon demand, its regular administrative fee, if any, and all expenses (including without limitation attorney’s fees) incurred by the Issuer in relation to the transactions contemplated by this Loan Agreement and the Indenture, which are not otherwise to be paid by the Obligor under this Loan Agreement or the Indenture, including without limitation, the obligation to pay rebatable arbitrage to the extent not paid under clause (j) of this Section;
(h) To the appropriate person, all taxes, assessments and charges required to be paid by Section 5.7;
(i) To the appropriate person, such payments as are required (i) as payment for or reimbursement of any and all reasonable costs, expenses and liabilities incurred by the Issuer or the Trustee or any of them in satisfaction of any obligations of the Obligor hereunder that the Obligor does not perform, or incurred in the defense of any action or proceeding with respect to the Project, this Loan Agreement, the Collateral Documents or the Note, or (ii) as reimbursement for expenses paid, or as prepayment of expenses to be paid, by the Issuer or the Trustee and that are incurred as a result of a request by the Obligor or a requirement of this Loan Agreement or the Collateral Documents and that the Obligor is not otherwise required to pay under this Loan Agreement;
(j) To the Trustee, on demand, any sums owing pursuant to Section 507 of the Indenture; and
(k) To the appropriate person, any other amounts required to be paid by the Obligor under this Loan Agreement, the Indenture or the Collateral Documents. Any past due Additional Payments installment shall continue as an obligation of the Obligor Borrower until they are paid such amount shall have been fully paid, and shall bear the Borrower agrees to pay, or cause to be paid, the same with interest thereon from the date of failure or, in the case of payments required by Sections 4.3(a)(ii) and (iii) hereof, the date 30 days after the date on which the Borrower is notified thereof, at two percent (2%) in excess of the Prime Rate during interest rate borne by the period such Additional Payments remain unpaidNotes until fully paid.
Appears in 1 contract
Additional Amounts Payable. The Obligor shall pay the following amounts to the following persons, all as “Additional Payments” under this Loan Agreement:
(a) If at any time that The Borrower hereby further expressly agrees to pay to the Bonds are outstanding an Event of Taxability occursIssuer or the Trustee, as applicable, as and when the Obligor same shall within thirty (30) days of the date of the Event of Taxability become due, (i) pay to the Trustee for deposit fees, including without limitation the Capital Reserve Premium, and reasonable expenses of the Issuer as provided in the Bond Fund one hundred percent (100%) of the unpaid installments owing on the Note pursuant to this Loan Agreement plus accrued interest to the date of redemption of the Bonds in accordance with Article III of the IndentureFinancing Documents, or (ii) commence payment the reasonable fees, charges and expenses of interest on the Note at Issuer and the Taxable Rate. Provided, however, that this subsection (a) shall be applicable only as Trustee in connection with or arising out of or relating to a Bondowner or Bondowners with respect to whom an Event of Taxability has occurred the issuance and only after the Obligor shall have had the opportunity to exercise applicable rights of contest, if any, granted to it pursuant to Section 3.4(c).
(b) Within thirty days after the occurrence of an Event of Taxability, whether such Event of Taxability occurs before or after payment servicing of the Bonds, the Obligor shall pay:
(i) to making, servicing, administration or collection of the Trustee for deposit in the Bond Fund the amount equal to the difference between the sum necessary to yield an interest rate on the unpaid principal balance Loan or exercise of any Bond as to which an Event rights or responsibilities under the Financing Documents, the Indenture or the Bonds, including reasonable charges of Taxability has occurredcounsel, from the Date of Taxability until the date on which the Issuer commences paying interest at the Taxable Rate, equal to the Taxable Rate less the amount of interest actually paid on the Bonds from the Date of Taxability to the date the Obligor commences paying interest at the Taxable Rate; plus
(ii) to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to the amount of any Additions to Tax, which are payable by such Bondowners to the United States or any state or local government as a consequence of the failure to include the interest or any amount in respect of interest on the Bond in the Federal Gross Income of such Bondowners and which are deductible by such Bondowners for Federal income tax purposes; plus
(iii) to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to the amount of any Additions to Tax which are payable by such Bondowners to the United States or any state or local government after payment of all Federal, state or local taxes required to be paid by such Bondowners in respect of the receipt thereof, as a consequence of the failure to include the interest or any amount in respect of interest on the Bond and which are not deductible by such Bondowners for Federal income tax purposes plus all Federal, state or local taxes required to be paid by such Bondowners with respect to the sums received pursuant to this subsection (iii); plus
(iv) to the Trustee, to the owners and former owners of the Bond and to the Issuer, as the case may be, an amount which is sufficient to reimburse them for all reasonable costs, fees and expenses accrued or to accrue as a result of the occurrence of an Event of Taxability.
(i) Not later than twenty (20) days after receipt by a Bondowner of a written revenue agent’s report asserting a deficiency against such Bondowner or otherwise setting forth a finding that interest on the Bonds is not excludable from such Bondowner’s gross income for Federal income tax purposes, such Bondowner shall notify the Obligor of such event and shall furnish the Obligor with a copy of the relevant portions of such written report; provided, that a failure by a Bondowner to comply with the requirement of this paragraph (c), except in the case of a willful failure, shall not in any way adversely affect the Bondowner’s right to the additional payments set forth in Section 3.4(b) hereof. Thereafter, the Bondowner shall afford the Obligor an opportunity to discuss such finding with the Internal Revenue Service and to make any written submission to the Internal Revenue Service which the Obligor deems desirable, and the Bondowner shall use its best efforts to facilitate such discussions and written submissions; provided, that if the Bondowner shall, in good faith and in its sole discretion, determine that the commencement or continuance of any such discussions or submissions by the Obligor would extend the audit and review of the Bondowner’s Federal income tax return beyond the period such audit and review would require but for the commencement or continuance of such discussions or submissions, or if the Bondowner shall otherwise determine, in good faith and in its sole discretion, that, for reasons other than matters relating to the proposed inclusion in Federal gross income of interest on the Bonds, it is in the Bondowner’s interest to discontinue the audit and review of the Bondowner’s Federal income tax return, then, upon receipt of notice by the Obligor from the Bondowner to such effect, the Obligor shall have no further right to commence or continue such discussions or submissions, and the Bondowner shall have the right to cause such audit and review to be closed.
(ii) If a Bondowner receives a statutory notice of deficiency relating to interest on the Bonds, and such Bondowner determines in its sole discretion not to pay the deficiency, it shall promptly notify the Obligor of its determination and shall, at the request of the Obligor, file a petition in the United States Tax Court and permit the Obligor to participate in the conduct of the proceedings before the United States Tax Court insofar as they relate to the tax treatment of interest on the Bonds.
(iii) If a Bondowner receives a statutory notice of deficiency and decides, in its sole discretion, not to file a petition in the United States Tax Court, then such Bondowner, at the request of the Obligor, shall file promptly a claim for refund with respect to the tax attributable to the inclusion of interest on the Bonds in such Bondowner’s Federal Gross Income. The Obligor shall provide such Bondowner with the funds necessary to enable such Bondowner to make the claim for refund with regard to the inclusion of interest issue. If any such claim shall not be allowed by the Internal Revenue Service, such Bondowner shall, at the request of the Obligor, promptly commence a suit for refund (in a forum chosen by such Bondowner in its sole discretion) and prosecute an appeal or appeals from any adverse determination as the Obligor shall direct, and the Bondowner shall permit the Obligor to participate in the conduct of such proceedings insofar as they relate to the tax treatment of interest on the Bonds.
(iv) For all purposes of this Section 3.4(c), the right of the Obligor to participate in any proceeding shall mean the right (subject to the approval of counsel for the Bondowner, which approval shall, taking into account the best interests of the Bondowner, the timeliness of any request made by the Obligor and all other relevant facts and circumstances, not be unreasonably withheld) to assist the Bondowner and its counsel in connection with the submission and content of documentation, protests, memoranda of fact and law and briefs, the conduct of oral arguments or presentations, the selection of witnesses and the negotiation of stipulations of fact, all as may be appropriate in proceedings before the Internal Revenue Service, the United States Tax Court, the Claims Court, a Federal District Court or any court of appellate jurisdiction, as the case may be.
(v) As a condition precedent to the exercise by the Obligor of the rights of contest granted to it under this Section 3.4(c), the Obligor shall deliver to the Bondowner an opinion of nationally recognized bond counsel to the effect that a meritorious claim exists with respect to the exemption of interest on the Bonds from Federal Gross Income. In addition, the Obligor shall reimburse the Bondowner and hold it harmless for all costs and expenses incurred in connection with any contest, including, without limitation, the amount of all taxes and Additions to Tax with respect to the tax attributable to the inclusion of interest on the Bonds in the Bondowner’s Federal Gross Income which were paid to the United States prior to the filing of a claim for refund under Section 3.4(d) hereof, all fees and disbursements of attorneys, accountants and expert witnesses. The Bondowner may also require the Obligor to post a bond to secure adequately payment of such costs and expenses.
(vi) Without limiting the rights of the Obligor to contest as hereinabove set forth and except as provided in clause (iii) above, the Bondowner shall have sole discretion to decide whether to prosecute an appeal from an adverse determination with respect to the tax treatment of interest on the Bonds at any level in any forum in which such adverse determination is made; provided, however, that in the event the Bondowner shall determine to prosecute an appeal with respect to any other issue, then the Bondowner shall, at the request of the Obligor, also prosecute an appeal with respect to such adverse determination and shall permit the Obligor to participate in the conduct of the proceedings insofar as they relate to the tax treatment of interest on the Bonds.
(d) In the event that the Obligor shall make any payments to a Bondowner pursuant to Section 3.4(b) and the Bondowner shall thereafter receive a refund as a consequence of a determination that interest on the Bonds is excludable from Federal Gross Income, the Bondowner shall be obligated to pay promptly to the Obligor the amount refunded (including any interest paid) such Bondowner by the Internal Revenue Service less any costs or expenses incurred by the Bondowner with respect to any proceeding or action for which the Obligor has not yet paid the Bondowner.
(e) If a Bondowner determines, in good faith after consultation with counsel, that there is a substantial likelihood for any reason whatsoever, including, without limitation, a change of law, issuance of temporary, proposed or final Treasury Regulations, issuance or revocation of an Internal Revenue Service ruling (including a private letter ruling) or a court decision, that it might be required to include all or any portion of the interest on the Bonds in its Federal Gross Income, or that the Bondowner shall be subject to any excise, preference, minimum or other type of tax because of its ownership of the Bonds or receipt of interest thereon, such Bondowner shall be entitled to request a Qualifying Opinion of Counsel with respect to interest on the Bonds for the period from the issuance of the Bonds or for any lesser period specified in the Bondowner’s request. The fees and disbursements of counsel in rendering such opinion shall be paid by the Obligor.
(f) To the Trustee, when due, all fees in accordance with its fee proposal to the Obligor and charges for services rendered under the Indenture, the Collateral Documents or this Loan Agreement, and all reasonable expenses (including without limitation reasonable fees and charges of any Paying Agent, Bond Registrar, counsel, accountant, engineer or other person) incurred in the performance of the duties of the Trustee and others under the Indenture, the Collateral Documents or this Loan Agreement for which the Trustee and other persons are entitled to repayment or reimbursement;
(g) To the Issuer, upon demand, its regular administrative fee, if any, and all expenses (including without limitation attorney’s fees) incurred by the Issuer in relation to the transactions contemplated by this Loan Agreement and the Indenture, which are not otherwise to be paid by the Obligor under this Loan Agreement or the Indenture, including without limitation, the obligation to pay rebatable arbitrage to the extent not paid under clause (j) of this Section;
(h) To the appropriate person, all taxes, assessments and charges required to be paid by Section 5.7;
(i) To the appropriate person, such payments as are required (i) as payment for or reimbursement of any and all reasonable costs, expenses and liabilities incurred by the Issuer or the Trustee or any of them in satisfaction of any obligations of the Obligor hereunder that the Obligor does not perform, or incurred in the defense of any action or proceeding with respect to the Project, this Loan Agreement, the Collateral Documents or the Note, or (ii) as reimbursement for expenses paid, or as prepayment of expenses to be paid, by the Issuer or the Trustee and that are incurred as a result of a request by the Obligor or a requirement of this Loan Agreement or the Collateral Documents and that the Obligor is not otherwise required to pay under this Loan Agreement;
(j) To the Trustee, on demandany Co-Trustee, any sums owing pursuant to Section 507 of the Indenture; and
(k) To the appropriate personAuthenticating Agent, any other Paying Agent and the Registrar for services, including reasonable charges of counsel, rendered by it directly or indirectly in connection with the Loan or the Bonds, (iv) any amounts that may be required to be paid by the Obligor under Issuer or the Borrower pursuant to Article XIII of the Indenture, (v) any amounts that may be required to be paid by the Borrower pursuant to Section 6.14 of this Loan Agreement, and (vi) the Indenture fees and charges of the Rating Services.
(b) The Borrower also agrees to pay all amounts payable by it under the Financing Documents and the Mortgage, including without limitation Section 6.7 hereof, at the time, in the manner and to the party therein provided, without delay, reduction or offset of any kind or for any reason.
(c) In the Collateral Documents. Any past due Additional Payments event the Borrower shall fail to make, or cause to be made, any of the payments required hereby, the unpaid item or installment shall continue as an obligation of the Obligor Borrower until they are paid such amount shall have been fully paid, and shall bear the Borrower agrees to pay, or cause to be paid, the same with interest thereon from the date of failure or, in the case of payments required by Sections 4.3(a)(ii), (iii) and (iv) hereof, the date 30 days after the date on which the Borrower is notified thereof, at two percent (2%) in excess the interest rate borne by the Bonds until fully paid, except as may otherwise be provided by Article XIII of the Prime Rate during the period such Indenture.
(d) The Additional Payments remain unpaidprovided for herein and in the Loan Note shall be made in immediately available funds as and when due directly to or for the account of the entitled party. In the event a party entitled to payment directs in writing that such payment be made to another party in the United States, the Borrower shall make payments to such designee.
Appears in 1 contract
Sources: Loan Agreement (Kti Inc)
Additional Amounts Payable. The Obligor If any Regulatory Change either shall pay the following amounts to the following persons, all as “Additional Payments” under this Loan Agreement:
(a) If at subject any time that the Bonds are outstanding an Event of Taxability occursLender to any additional tax, the Obligor shall within thirty (30) days duty, charge, deduction or withholding with respect to any of the date Loans or Letters of Credit (other than a tax measure by the net or gross income of the Event Lender), or (b) impose or increase any reserve, special deposit or similar requirement on account of Taxability any of the Loans or Letters of Credit not otherwise provided in this Agreement or (c) impose increased minimum capital requirements on the Lender on account of its issuing or maintaining any of the Loans or Letters of Credit; and if any of the foregoing (i) pay results in any increase to the Trustee for deposit Lender in the Bond Fund one hundred percent (100%) cost of issuing or maintaining any of the unpaid installments owing Loans or Letters of Credit, or making any payment on the Note pursuant to this Loan Agreement plus accrued interest to the date account of redemption any of the Bonds in accordance with Article III Loans or Letters of the IndentureCredit, or (ii) commence payment of interest on the Note at the Taxable Rate. Provided, however, that this subsection (a) shall be applicable only as to a Bondowner or Bondowners with respect to whom an Event of Taxability has occurred and only after the Obligor shall have had the opportunity to exercise applicable rights of contest, if any, granted to it pursuant to Section 3.4(c).
(b) Within thirty days after the occurrence of an Event of Taxability, whether such Event of Taxability occurs before or after payment of the Bonds, the Obligor shall pay:
(i) to the Trustee for deposit in the Bond Fund the amount equal to the difference between the sum necessary to yield an interest rate on the unpaid principal balance of any Bond as to which an Event of Taxability has occurred, from the Date of Taxability until the date on which the Issuer commences paying interest at the Taxable Rate, equal to the Taxable Rate less the amount of interest actually paid on the Bonds from the Date of Taxability to the date the Obligor commences paying interest at the Taxable Rate; plus
(ii) to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to reduces the amount of any Additions payment receivable by the Lender under this Agreement with respect to Tax, which are payable by such Bondowners to the United States or any state or local government as a consequence of the failure to include the interest Loans or any amount in respect Letters of interest on the Bond in the Federal Gross Income of such Bondowners and which are deductible by such Bondowners for Federal income tax purposes; plus
Credit, (iii) requires the Lender to make any payment calculated by reference to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to the gross amount of any Additions to Tax which are payable by such Bondowners to the United States sum received or any state or local government after payment of all Federal, state or local taxes required to be paid by such Bondowners in respect the Lender pursuant to any of the receipt thereofLoans or Letters of Credit, as a consequence or (iv) reduces the rate of the failure to include the interest or any amount in respect of interest return on the Bond and Lender's capital to a level below that which are not deductible by such Bondowners for Federal income tax purposes plus all Federal, state or local taxes required to be paid by such Bondowners the Lender could otherwise have achieved (taking into consideration the Lender's policies with respect to capital adequacy), then the sums received pursuant to this subsection (iii); plus
(iv) Company shall pay to the Trustee, to the owners and former owners of the Bond and to the IssuerLender, as additional compensation for the case may beLoans or Letters of Credit, an amount which is sufficient to reimburse them such amounts as will compensate the Lender for all reasonable such increased costs, fees and expenses accrued payments or to accrue as a result of the occurrence of an Event of Taxability.
(i) Not later than reductions. Within twenty (20) days after receipt (A) the initial demand therefor and (b) presentation by a Bondowner the Lender of a written revenue agent’s report asserting certificate to the Company containing a deficiency against such Bondowner or otherwise setting forth a finding that interest on statement of the Bonds is not excludable from such Bondowner’s gross income for Federal income tax purposes, such Bondowner shall notify the Obligor cause of such event increased costs, payments or reductions and shall furnish the Obligor with a copy calculation of the relevant portions of such written report; provided, that a failure by a Bondowner to comply with the requirement of this paragraph amounts thereof (c), except in the case of a willful failure, which statement and calculation shall not in any way adversely affect the Bondowner’s right to the additional payments set forth in Section 3.4(b) hereof. Thereafter, the Bondowner shall afford the Obligor an opportunity to discuss such finding with the Internal Revenue Service and to make any written submission to the Internal Revenue Service which the Obligor deems desirable, and the Bondowner shall use its best efforts to facilitate such discussions and written submissions; provided, that if the Bondowner shall, in good faith and in its sole discretion, determine that the commencement or continuance of any such discussions or submissions by the Obligor would extend the audit and review of the Bondowner’s Federal income tax return beyond the period such audit and review would require but for the commencement or continuance of such discussions or submissions, or if the Bondowner shall otherwise determine, in good faith and in its sole discretion, that, for reasons other than matters relating to the proposed inclusion in Federal gross income of interest on the Bonds, it is in the Bondowner’s interest to discontinue the audit and review of the Bondowner’s Federal income tax return, then, upon receipt of notice by the Obligor from the Bondowner to such effect, the Obligor shall have no further right to commence or continue such discussions or submissions, and the Bondowner shall have the right to cause such audit and review be presumed prima facie to be closed.
(ii) If a Bondowner receives a statutory notice of deficiency relating to interest on the Bonds, and such Bondowner determines in its sole discretion not to pay the deficiency, it shall promptly notify the Obligor of its determination and shall, at the request of the Obligor, file a petition in the United States Tax Court and permit the Obligor to participate in the conduct of the proceedings before the United States Tax Court insofar as they relate to the tax treatment of interest on the Bonds.
(iii) If a Bondowner receives a statutory notice of deficiency and decides, in its sole discretion, not to file a petition in the United States Tax Court, then such Bondowner, at the request of the Obligor, shall file promptly a claim for refund with respect to the tax attributable to the inclusion of interest on the Bonds in such Bondowner’s Federal Gross Income. The Obligor shall provide such Bondowner with the funds necessary to enable such Bondowner to make the claim for refund with regard to the inclusion of interest issue. If any such claim shall not be allowed by the Internal Revenue Service, such Bondowner shall, at the request of the Obligor, promptly commence a suit for refund (in a forum chosen by such Bondowner in its sole discretion) and prosecute an appeal or appeals from any adverse determination as the Obligor shall direct, and the Bondowner shall permit the Obligor to participate in the conduct of such proceedings insofar as they relate to the tax treatment of interest on the Bonds.
(iv) For all purposes of this Section 3.4(ccorrect), the right of Company shall pay the Obligor to participate in any proceeding shall mean the right (subject to the approval of counsel for the Bondowner, which approval shall, taking into account the best interests of the Bondowner, the timeliness of any request made by the Obligor and all other relevant facts and circumstances, not be unreasonably withheld) to assist the Bondowner and its counsel in connection with the submission and content of documentation, protests, memoranda of fact and law and briefs, the conduct of oral arguments or presentations, the selection of witnesses and the negotiation of stipulations of fact, all as may be appropriate in proceedings before the Internal Revenue Service, the United States Tax Court, the Claims Court, a Federal District Court or any court of appellate jurisdiction, as the case may be.
(v) As a condition precedent to the exercise by the Obligor of the rights of contest granted to it under this Section 3.4(c), the Obligor shall deliver to the Bondowner an opinion of nationally recognized bond counsel to the effect that a meritorious claim exists with respect to the exemption of interest on the Bonds from Federal Gross Income. In addition, the Obligor shall reimburse the Bondowner and hold it harmless for all costs and expenses incurred in connection with any contest, including, without limitation, the additional amount of all taxes and Additions to Tax with respect to the tax attributable to the inclusion of interest on the Bonds in the Bondowner’s Federal Gross Income which were paid to the United States prior to the filing of a claim for refund under Section 3.4(d) hereof, all fees and disbursements of attorneys, accountants and expert witnesses. The Bondowner may also require the Obligor to post a bond to secure adequately payment of such costs and expenses.
(vi) Without limiting the rights of the Obligor to contest as hereinabove set forth and except as provided in clause (iii) above, the Bondowner shall have sole discretion to decide whether to prosecute an appeal from an adverse determination with respect to the tax treatment of interest on the Bonds at any level in any forum in which such adverse determination is made; provided, however, that in the event the Bondowner shall determine to prosecute an appeal with respect to any other issue, then the Bondowner shall, at the request of the Obligor, also prosecute an appeal with respect to such adverse determination and shall permit the Obligor to participate in the conduct of the proceedings insofar as they relate to the tax treatment of interest on the Bonds.
(d) In the event that the Obligor shall make any payments to a Bondowner pursuant to Section 3.4(b) and the Bondowner shall thereafter receive a refund as a consequence of a determination that interest on the Bonds is excludable from Federal Gross Income, the Bondowner shall be obligated to pay promptly to the Obligor the amount refunded (including any interest paid) such Bondowner by the Internal Revenue Service less any costs or expenses incurred by the Bondowner with respect to any proceeding or action for which the Obligor has not yet paid the Bondowner.
(e) If a Bondowner determines, in good faith after consultation with counsel, that there is a substantial likelihood for any reason whatsoever, including, without limitation, a change of law, issuance of temporary, proposed or final Treasury Regulations, issuance or revocation of an Internal Revenue Service ruling (including a private letter ruling) or a court decision, that it might be required to include all or any portion of the interest on the Bonds in its Federal Gross Income, or that the Bondowner shall be subject to any excise, preference, minimum or other type of tax because of its ownership of the Bonds or receipt of interest thereon, such Bondowner shall be entitled to request a Qualifying Opinion of Counsel with respect to interest on the Bonds for the period payable measured from the issuance of date such change, enactment, adoption or interpretation first affects the Bonds or for any lesser period specified in the Bondowner’s request. The fees and disbursements of counsel in rendering such opinion shall be paid by the ObligorLender.
(f) To the Trustee, when due, all fees in accordance with its fee proposal to the Obligor and charges for services rendered under the Indenture, the Collateral Documents or this Loan Agreement, and all reasonable expenses (including without limitation reasonable fees and charges of any Paying Agent, Bond Registrar, counsel, accountant, engineer or other person) incurred in the performance of the duties of the Trustee and others under the Indenture, the Collateral Documents or this Loan Agreement for which the Trustee and other persons are entitled to repayment or reimbursement;
(g) To the Issuer, upon demand, its regular administrative fee, if any, and all expenses (including without limitation attorney’s fees) incurred by the Issuer in relation to the transactions contemplated by this Loan Agreement and the Indenture, which are not otherwise to be paid by the Obligor under this Loan Agreement or the Indenture, including without limitation, the obligation to pay rebatable arbitrage to the extent not paid under clause (j) of this Section;
(h) To the appropriate person, all taxes, assessments and charges required to be paid by Section 5.7;
(i) To the appropriate person, such payments as are required (i) as payment for or reimbursement of any and all reasonable costs, expenses and liabilities incurred by the Issuer or the Trustee or any of them in satisfaction of any obligations of the Obligor hereunder that the Obligor does not perform, or incurred in the defense of any action or proceeding with respect to the Project, this Loan Agreement, the Collateral Documents or the Note, or (ii) as reimbursement for expenses paid, or as prepayment of expenses to be paid, by the Issuer or the Trustee and that are incurred as a result of a request by the Obligor or a requirement of this Loan Agreement or the Collateral Documents and that the Obligor is not otherwise required to pay under this Loan Agreement;
(j) To the Trustee, on demand, any sums owing pursuant to Section 507 of the Indenture; and
(k) To the appropriate person, any other amounts required to be paid by the Obligor under this Loan Agreement, the Indenture or the Collateral Documents. Any past due Additional Payments shall continue as an obligation of the Obligor until they are paid and shall bear interest at two percent (2%) in excess of the Prime Rate during the period such Additional Payments remain unpaid.
Appears in 1 contract
Additional Amounts Payable. The Obligor shall pay If any change or the following amounts to enactment, adoption or judicial or administrative interpretation of any law, regulation, treaty, guideline or directive (including, without limitation, Regulation D of the following persons, all as “Additional Payments” under this Loan Agreement:
Board of Governors of the Federal Reserve System) either (a) If at subjects the Lender or any time that the Bonds are outstanding an Event of Taxability occursapplicable Lending Installation to any additional tax, the Obligor shall within thirty (30) days duty, charge, deduction or withholding with respect to any of the date Facilities (other than a tax measured by the net or gross income of the Event Lender), or (b) imposes or increases any reserve, special deposit or similar requirement on account of Taxability any of the Facilities not otherwise provided in this Agreement or (c) imposes increased minimum capital requirements on the Lender or any applicable Lending Installation on account of its issuing or maintaining any of the Facilities; and if any of the foregoing (i) pay results in an increase to the Trustee for deposit Lender or the applicable Lending Installation in the Bond Fund one hundred percent (100%) cost of issuing or maintaining any of the unpaid installments owing Facilities, or making any payment on the Note pursuant to this Loan Agreement plus accrued interest to the date account of redemption any of the Bonds in accordance with Article III of the IndentureFacilities, or (ii) commence payment of interest on the Note at the Taxable Rate. Provided, however, that this subsection (a) shall be applicable only as to a Bondowner or Bondowners with respect to whom an Event of Taxability has occurred and only after the Obligor shall have had the opportunity to exercise applicable rights of contest, if any, granted to it pursuant to Section 3.4(c).
(b) Within thirty days after the occurrence of an Event of Taxability, whether such Event of Taxability occurs before or after payment of the Bonds, the Obligor shall pay:
(i) to the Trustee for deposit in the Bond Fund the amount equal to the difference between the sum necessary to yield an interest rate on the unpaid principal balance of any Bond as to which an Event of Taxability has occurred, from the Date of Taxability until the date on which the Issuer commences paying interest at the Taxable Rate, equal to the Taxable Rate less the amount of interest actually paid on the Bonds from the Date of Taxability to the date the Obligor commences paying interest at the Taxable Rate; plus
(ii) to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to reduces the amount of any Additions payment receivable by the Lender or the applicable Lending Installation under this Agreement with respect to Tax, which are payable by such Bondowners to the United States or any state or local government as a consequence of the failure to include the interest or any amount in respect of interest on the Bond in the Federal Gross Income of such Bondowners and which are deductible by such Bondowners for Federal income tax purposes; plus
Facilities, (iii) requires the Lender or the applicable Lending Installation to make any payment calculated by reference to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to the gross amount of any Additions to Tax which are payable by such Bondowners to the United States sum received or any state or local government after payment of all Federal, state or local taxes required to be paid by such Bondowners in respect the Lender or the applicable Lending Installation pursuant to any of the receipt thereofFacilities, as a consequence or (iv) reduces the rate of the failure to include the interest or any amount in respect of interest return on the Bond and Lender's or the applicable Lending Installation's capital to a level below that which are not deductible by the Lender or the applicable Lending Installation could otherwise have achieved (taking into consideration such Bondowners for Federal income tax purposes plus all Federal, state or local taxes required to be paid by such Bondowners party's policies with respect to the sums received pursuant to this subsection (iiiCapital Adequacy); plus
(iv) , then Borrower shall pay to the Trustee, to Lender or the owners and former owners of the Bond and to the Issuerapplicable Lending Installation, as additional compensation for the case may beFacilities, an amount which is sufficient to reimburse them such amounts as will compensate the Lender or the applicable Lending Installation for all reasonable costssuch increased cost, fees and expenses accrued payment or to accrue as a result of the occurrence of an Event of Taxability.
(i) Not later than reduction. Within twenty (20) days after receipt (a) the initial demand therefor and (b) presentation by a Bondowner the Lender of a written revenue agent’s report asserting certificate to Borrower containing a deficiency against such Bondowner or otherwise setting forth a finding that interest on statement of the Bonds is not excludable from such Bondowner’s gross income for Federal income tax purposes, such Bondowner shall notify the Obligor cause of such event increased cost, payment or reduction and shall furnish the Obligor with a copy calculation of the relevant portions of such written report; provided, that a failure by a Bondowner amount thereof (which statement and calculation shall be presumed prima facie to comply with the requirement of this paragraph (cbe correct), except in the case of a willful failure, Borrower shall not in any way adversely affect the Bondowner’s right to pay the additional payments set forth in Section 3.4(b) hereof. Thereafter, the Bondowner shall afford the Obligor an opportunity to discuss such finding with the Internal Revenue Service and to make any written submission to the Internal Revenue Service which the Obligor deems desirable, and the Bondowner shall use its best efforts to facilitate such discussions and written submissions; provided, that if the Bondowner shall, in good faith and in its sole discretion, determine that the commencement or continuance of any such discussions or submissions by the Obligor would extend the audit and review of the Bondowner’s Federal income tax return beyond the period such audit and review would require but for the commencement or continuance of such discussions or submissions, or if the Bondowner shall otherwise determine, in good faith and in its sole discretion, that, for reasons other than matters relating to the proposed inclusion in Federal gross income of interest on the Bonds, it is in the Bondowner’s interest to discontinue the audit and review of the Bondowner’s Federal income tax return, then, upon receipt of notice by the Obligor amount payable measured from the Bondowner to date such effectchange, enactment, adoption or interpretation first affects the Obligor shall have no further right to commence or continue such discussions or submissions, and the Bondowner shall have the right to cause such audit and review to be closed.
(ii) If a Bondowner receives a statutory notice of deficiency relating to interest on the Bonds, and such Bondowner determines in its sole discretion not to pay the deficiency, it shall promptly notify the Obligor of its determination and shall, at the request of the Obligor, file a petition in the United States Tax Court and permit the Obligor to participate in the conduct of the proceedings before the United States Tax Court insofar as they relate to the tax treatment of interest on the Bonds.
(iii) If a Bondowner receives a statutory notice of deficiency and decides, in its sole discretion, not to file a petition in the United States Tax Court, then such Bondowner, at the request of the Obligor, shall file promptly a claim for refund with respect to the tax attributable to the inclusion of interest on the Bonds in such Bondowner’s Federal Gross Income. The Obligor shall provide such Bondowner with the funds necessary to enable such Bondowner to make the claim for refund with regard to the inclusion of interest issue. If any such claim shall not be allowed by the Internal Revenue Service, such Bondowner shall, at the request of the Obligor, promptly commence a suit for refund (in a forum chosen by such Bondowner in its sole discretion) and prosecute an appeal or appeals from any adverse determination as the Obligor shall direct, and the Bondowner shall permit the Obligor to participate in the conduct of such proceedings insofar as they relate to the tax treatment of interest on the Bonds.
(iv) For all purposes of this Section 3.4(c), the right of the Obligor to participate in any proceeding shall mean the right (subject to the approval of counsel for the Bondowner, which approval shall, taking into account the best interests of the Bondowner, the timeliness of any request made by the Obligor and all other relevant facts and circumstances, not be unreasonably withheld) to assist the Bondowner and its counsel in connection with the submission and content of documentation, protests, memoranda of fact and law and briefs, the conduct of oral arguments or presentations, the selection of witnesses and the negotiation of stipulations of fact, all as may be appropriate in proceedings before the Internal Revenue Service, the United States Tax Court, the Claims Court, a Federal District Court or any court of appellate jurisdiction, as the case may be.
(v) As a condition precedent to the exercise by the Obligor of the rights of contest granted to it under this Section 3.4(c), the Obligor shall deliver to the Bondowner an opinion of nationally recognized bond counsel to the effect that a meritorious claim exists with respect to the exemption of interest on the Bonds from Federal Gross Income. In addition, the Obligor shall reimburse the Bondowner and hold it harmless for all costs and expenses incurred in connection with any contest, including, without limitation, the amount of all taxes and Additions to Tax with respect to the tax attributable to the inclusion of interest on the Bonds in the Bondowner’s Federal Gross Income which were paid to the United States prior to the filing of a claim for refund under Section 3.4(d) hereof, all fees and disbursements of attorneys, accountants and expert witnesses. The Bondowner may also require the Obligor to post a bond to secure adequately payment of such costs and expenses.
(vi) Without limiting the rights of the Obligor to contest as hereinabove set forth and except as provided in clause (iii) above, the Bondowner shall have sole discretion to decide whether to prosecute an appeal from an adverse determination with respect to the tax treatment of interest on the Bonds at any level in any forum in which such adverse determination is made; provided, however, that in the event the Bondowner shall determine to prosecute an appeal with respect to any other issue, then the Bondowner shall, at the request of the Obligor, also prosecute an appeal with respect to such adverse determination and shall permit the Obligor to participate in the conduct of the proceedings insofar as they relate to the tax treatment of interest on the Bonds.
(d) In the event that the Obligor shall make any payments to a Bondowner pursuant to Section 3.4(b) and the Bondowner shall thereafter receive a refund as a consequence of a determination that interest on the Bonds is excludable from Federal Gross Income, the Bondowner shall be obligated to pay promptly to the Obligor the amount refunded (including any interest paid) such Bondowner by the Internal Revenue Service less any costs or expenses incurred by the Bondowner with respect to any proceeding or action for which the Obligor has not yet paid the Bondowner.
(e) If a Bondowner determines, in good faith after consultation with counsel, that there is a substantial likelihood for any reason whatsoever, including, without limitation, a change of law, issuance of temporary, proposed or final Treasury Regulations, issuance or revocation of an Internal Revenue Service ruling (including a private letter ruling) or a court decision, that it might be required to include all or any portion of the interest on the Bonds in its Federal Gross Income, or that the Bondowner shall be subject to any excise, preference, minimum or other type of tax because of its ownership of the Bonds or receipt of interest thereon, such Bondowner shall be entitled to request a Qualifying Opinion of Counsel with respect to interest on the Bonds for the period from the issuance of the Bonds or for any lesser period specified in the Bondowner’s request. The fees and disbursements of counsel in rendering such opinion shall be paid by the Obligor.
(f) To the Trustee, when due, all fees in accordance with its fee proposal to the Obligor and charges for services rendered under the Indenture, the Collateral Documents or this Loan Agreement, and all reasonable expenses (including without limitation reasonable fees and charges of any Paying Agent, Bond Registrar, counsel, accountant, engineer or other person) incurred in the performance of the duties of the Trustee and others under the Indenture, the Collateral Documents or this Loan Agreement for which the Trustee and other persons are entitled to repayment or reimbursement;
(g) To the Issuer, upon demand, its regular administrative fee, if any, and all expenses (including without limitation attorney’s fees) incurred by the Issuer in relation to the transactions contemplated by this Loan Agreement and the Indenture, which are not otherwise to be paid by the Obligor under this Loan Agreement Lender or the Indenture, including without limitation, the obligation to pay rebatable arbitrage to the extent not paid under clause (j) of this Section;
(h) To the appropriate person, all taxes, assessments and charges required to be paid by Section 5.7;
(i) To the appropriate person, such payments as are required (i) as payment for or reimbursement of any and all reasonable costs, expenses and liabilities incurred by the Issuer or the Trustee or any of them in satisfaction of any obligations of the Obligor hereunder that the Obligor does not perform, or incurred in the defense of any action or proceeding with respect to the Project, this Loan Agreement, the Collateral Documents or the Note, or (ii) as reimbursement for expenses paid, or as prepayment of expenses to be paid, by the Issuer or the Trustee and that are incurred as a result of a request by the Obligor or a requirement of this Loan Agreement or the Collateral Documents and that the Obligor is not otherwise required to pay under this Loan Agreement;
(j) To the Trustee, on demand, any sums owing pursuant to Section 507 of the Indenture; and
(k) To the appropriate person, any other amounts required to be paid by the Obligor under this Loan Agreement, the Indenture or the Collateral Documents. Any past due Additional Payments shall continue as an obligation of the Obligor until they are paid and shall bear interest at two percent (2%) in excess of the Prime Rate during the period such Additional Payments remain unpaidapplicable Lending Installation.
Appears in 1 contract
Additional Amounts Payable. The Obligor shall pay If any change or the following amounts to enactment, adoption or judicial or administrative interpretation of any law, regulation, treaty, guideline or directive (including, without limitation, Regulation D of the following persons, all as “Additional Payments” under this Loan Agreement:
Board of Governors of the Federal Reserve System) either (a) If at subjects any time that Lender or any applicable Lending Installation or the Bonds are outstanding an Event of Taxability occursLC Issuer to any additional tax, the Obligor shall within thirty (30) days duty, charge, deduction or withholding with respect to any of the date Facilities (other than a tax measured by the net or gross income of such Lender), or (b) imposes or increases any reserve, special deposit or similar requirement on account of any of the Event Facilities not otherwise provided in this Agreement or (c) imposes increased minimum capital requirements on any Lender or any applicable Lending Installation or the LC Issuer on account of Taxability its issuing or maintaining any of the Facilities; and if any of the foregoing (i) pay results in an increase to such Lender or the Trustee for deposit applicable Lending Installation or the LC Issuer in the Bond Fund one hundred percent (100%) cost of issuing or maintaining any of the unpaid installments owing Facilities, or making any payment on the Note pursuant to this Loan Agreement plus accrued interest to the date account of redemption any of the Bonds in accordance with Article III of the IndentureFacilities, or (ii) commence payment of interest on the Note at the Taxable Rate. Provided, however, that this subsection (a) shall be applicable only as to a Bondowner or Bondowners with respect to whom an Event of Taxability has occurred and only after the Obligor shall have had the opportunity to exercise applicable rights of contest, if any, granted to it pursuant to Section 3.4(c).
(b) Within thirty days after the occurrence of an Event of Taxability, whether such Event of Taxability occurs before or after payment of the Bonds, the Obligor shall pay:
(i) to the Trustee for deposit in the Bond Fund the amount equal to the difference between the sum necessary to yield an interest rate on the unpaid principal balance of any Bond as to which an Event of Taxability has occurred, from the Date of Taxability until the date on which the Issuer commences paying interest at the Taxable Rate, equal to the Taxable Rate less the amount of interest actually paid on the Bonds from the Date of Taxability to the date the Obligor commences paying interest at the Taxable Rate; plus
(ii) to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to reduces the amount of any Additions to Tax, which are payable payment receivable by such Bondowners Lender or the applicable Lending Installation or the LC Issuer under this Agreement with respect to the United States or any state or local government as a consequence of the failure to include the interest or any amount in respect of interest on the Bond in the Federal Gross Income of such Bondowners and which are deductible by such Bondowners for Federal income tax purposes; plus
Facilities, (iii) requires such Lender or the applicable Lending Installation or the LC Issuer to make any payment calculated by reference to the owners and former owners of any Bond as to which an Event of Taxability has occurred, an amount equal to the gross amount of any Additions to Tax which are payable by such Bondowners to the United States sum received or any state or local government after payment of all Federal, state or local taxes required to be paid by such Bondowners in respect Lender or the applicable Lending Installation or the LC Issuer pursuant to any of the receipt thereofFacilities, as or (iv) reduces the rate of return on such Lender's or the applicable Lending Installation or the LC Issuer's capital to a consequence of level below that which such Lender or the failure to include applicable Lending Installation or the interest or any amount in respect of interest on the Bond and which are not deductible by LC Issuer could otherwise have achieved (taking into consideration such Bondowners for Federal income tax purposes plus all Federal, state or local taxes required to be paid by such Bondowners party's policies with respect to Capital Adequacy), then Borrower shall pay to such Lender or the sums received pursuant to this subsection (iii); plus
(iv) to applicable Lending Installation or the Trustee, to the owners and former owners of the Bond and to the LC Issuer, as additional compensation for the case may beFacilities, an amount which is sufficient to reimburse them such amounts as will compensate such Lender or the applicable Lending Installation or the LC Issuer for all reasonable costssuch ------------------------------------------------------------------------------- CREDIT AGREEMENT PAGE 61 increased cost, fees and expenses accrued payment or to accrue as a result of the occurrence of an Event of Taxability.
(i) Not later than reduction. Within twenty (20) days after receipt (a) the initial demand therefor and (b) presentation by a Bondowner Lender of a written revenue agent’s report asserting certificate to Borrower containing a deficiency against such Bondowner or otherwise setting forth a finding that interest on statement of the Bonds is not excludable from such Bondowner’s gross income for Federal income tax purposes, such Bondowner shall notify the Obligor cause of such event increased cost, payment or reduction and shall furnish the Obligor with a copy calculation of the relevant portions of such written report; provided, that a failure by a Bondowner amount thereof (which statement and calculation shall be presumed prima facie to comply with the requirement of this paragraph (cbe correct), except in the case of a willful failure, Borrower shall not in any way adversely affect the Bondowner’s right to pay the additional payments set forth in Section 3.4(b) hereof. Thereafter, the Bondowner shall afford the Obligor an opportunity to discuss such finding with the Internal Revenue Service and to make any written submission to the Internal Revenue Service which the Obligor deems desirable, and the Bondowner shall use its best efforts to facilitate such discussions and written submissions; provided, that if the Bondowner shall, in good faith and in its sole discretion, determine that the commencement or continuance of any such discussions or submissions by the Obligor would extend the audit and review of the Bondowner’s Federal income tax return beyond the period such audit and review would require but for the commencement or continuance of such discussions or submissions, or if the Bondowner shall otherwise determine, in good faith and in its sole discretion, that, for reasons other than matters relating to the proposed inclusion in Federal gross income of interest on the Bonds, it is in the Bondowner’s interest to discontinue the audit and review of the Bondowner’s Federal income tax return, then, upon receipt of notice by the Obligor amount payable measured from the Bondowner to date such effectchange, the Obligor shall have no further right to commence enactment, adoption or continue interpretation first affects such discussions or submissions, and the Bondowner shall have the right to cause such audit and review to be closed.
(ii) If a Bondowner receives a statutory notice of deficiency relating to interest on the Bonds, and such Bondowner determines in its sole discretion not to pay the deficiency, it shall promptly notify the Obligor of its determination and shall, at the request of the Obligor, file a petition in the United States Tax Court and permit the Obligor to participate in the conduct of the proceedings before the United States Tax Court insofar as they relate to the tax treatment of interest on the Bonds.
(iii) If a Bondowner receives a statutory notice of deficiency and decides, in its sole discretion, not to file a petition in the United States Tax Court, then such Bondowner, at the request of the Obligor, shall file promptly a claim for refund with respect to the tax attributable to the inclusion of interest on the Bonds in such Bondowner’s Federal Gross Income. The Obligor shall provide such Bondowner with the funds necessary to enable such Bondowner to make the claim for refund with regard to the inclusion of interest issue. If any such claim shall not be allowed by the Internal Revenue Service, such Bondowner shall, at the request of the Obligor, promptly commence a suit for refund (in a forum chosen by such Bondowner in its sole discretion) and prosecute an appeal or appeals from any adverse determination as the Obligor shall direct, and the Bondowner shall permit the Obligor to participate in the conduct of such proceedings insofar as they relate to the tax treatment of interest on the Bonds.
(iv) For all purposes of this Section 3.4(c), the right of the Obligor to participate in any proceeding shall mean the right (subject to the approval of counsel for the Bondowner, which approval shall, taking into account the best interests of the Bondowner, the timeliness of any request made by the Obligor and all other relevant facts and circumstances, not be unreasonably withheld) to assist the Bondowner and its counsel in connection with the submission and content of documentation, protests, memoranda of fact and law and briefs, the conduct of oral arguments or presentations, the selection of witnesses and the negotiation of stipulations of fact, all as may be appropriate in proceedings before the Internal Revenue Service, the United States Tax Court, the Claims Court, a Federal District Court or any court of appellate jurisdiction, as the case may be.
(v) As a condition precedent to the exercise by the Obligor of the rights of contest granted to it under this Section 3.4(c), the Obligor shall deliver to the Bondowner an opinion of nationally recognized bond counsel to the effect that a meritorious claim exists with respect to the exemption of interest on the Bonds from Federal Gross Income. In addition, the Obligor shall reimburse the Bondowner and hold it harmless for all costs and expenses incurred in connection with any contest, including, without limitation, the amount of all taxes and Additions to Tax with respect to the tax attributable to the inclusion of interest on the Bonds in the Bondowner’s Federal Gross Income which were paid to the United States prior to the filing of a claim for refund under Section 3.4(d) hereof, all fees and disbursements of attorneys, accountants and expert witnesses. The Bondowner may also require the Obligor to post a bond to secure adequately payment of such costs and expenses.
(vi) Without limiting the rights of the Obligor to contest as hereinabove set forth and except as provided in clause (iii) above, the Bondowner shall have sole discretion to decide whether to prosecute an appeal from an adverse determination with respect to the tax treatment of interest on the Bonds at any level in any forum in which such adverse determination is made; provided, however, that in the event the Bondowner shall determine to prosecute an appeal with respect to any other issue, then the Bondowner shall, at the request of the Obligor, also prosecute an appeal with respect to such adverse determination and shall permit the Obligor to participate in the conduct of the proceedings insofar as they relate to the tax treatment of interest on the Bonds.
(d) In the event that the Obligor shall make any payments to a Bondowner pursuant to Section 3.4(b) and the Bondowner shall thereafter receive a refund as a consequence of a determination that interest on the Bonds is excludable from Federal Gross Income, the Bondowner shall be obligated to pay promptly to the Obligor the amount refunded (including any interest paid) such Bondowner by the Internal Revenue Service less any costs or expenses incurred by the Bondowner with respect to any proceeding or action for which the Obligor has not yet paid the Bondowner.
(e) If a Bondowner determines, in good faith after consultation with counsel, that there is a substantial likelihood for any reason whatsoever, including, without limitation, a change of law, issuance of temporary, proposed or final Treasury Regulations, issuance or revocation of an Internal Revenue Service ruling (including a private letter ruling) or a court decision, that it might be required to include all or any portion of the interest on the Bonds in its Federal Gross Income, or that the Bondowner shall be subject to any excise, preference, minimum or other type of tax because of its ownership of the Bonds or receipt of interest thereon, such Bondowner shall be entitled to request a Qualifying Opinion of Counsel with respect to interest on the Bonds for the period from the issuance of the Bonds or for any lesser period specified in the Bondowner’s request. The fees and disbursements of counsel in rendering such opinion shall be paid by the Obligor.
(f) To the Trustee, when due, all fees in accordance with its fee proposal to the Obligor and charges for services rendered under the Indenture, the Collateral Documents or this Loan Agreement, and all reasonable expenses (including without limitation reasonable fees and charges of any Paying Agent, Bond Registrar, counsel, accountant, engineer or other person) incurred in the performance of the duties of the Trustee and others under the Indenture, the Collateral Documents or this Loan Agreement for which the Trustee and other persons are entitled to repayment or reimbursement;
(g) To the Issuer, upon demand, its regular administrative fee, if any, and all expenses (including without limitation attorney’s fees) incurred by the Issuer in relation to the transactions contemplated by this Loan Agreement and the Indenture, which are not otherwise to be paid by the Obligor under this Loan Agreement Lender or the Indenture, including without limitation, the obligation to pay rebatable arbitrage to the extent not paid under clause (j) of this Section;
(h) To the appropriate person, all taxes, assessments and charges required to be paid by Section 5.7;
(i) To the appropriate person, such payments as are required (i) as payment for or reimbursement of any and all reasonable costs, expenses and liabilities incurred by the Issuer applicable Lending Installation or the Trustee or any of them in satisfaction of any obligations of the Obligor hereunder that the Obligor does not perform, or incurred in the defense of any action or proceeding with respect to the Project, this Loan Agreement, the Collateral Documents or the Note, or (ii) as reimbursement for expenses paid, or as prepayment of expenses to be paid, by the Issuer or the Trustee and that are incurred as a result of a request by the Obligor or a requirement of this Loan Agreement or the Collateral Documents and that the Obligor is not otherwise required to pay under this Loan Agreement;
(j) To the Trustee, on demand, any sums owing pursuant to Section 507 of the Indenture; and
(k) To the appropriate person, any other amounts required to be paid by the Obligor under this Loan Agreement, the Indenture or the Collateral Documents. Any past due Additional Payments shall continue as an obligation of the Obligor until they are paid and shall bear interest at two percent (2%) in excess of the Prime Rate during the period such Additional Payments remain unpaidLC Issuer.
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