Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 5 contracts
Sources: Participation Agreement (Us Airways Inc), Participation Agreement (Us Airways Inc), Participation Agreement (Us Airways Inc)
Contests. If a written claim is made against In respect of the indemnification provided under Section 7.1(a), promptly after receipt by an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written of notice of such proceeding) for Taxes as to which Lessee could be liable for payment any pending or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day periodthreatened Claim, such Indemnitee shall, if a claim for indemnification in respect thereof is to be made against the Lessee, give notice thereof to the Lessee. So long as no Event of Default is continuing, the Lessee, at its own expense, may elect to assume the defense of any such Claim through its own counsel, which shall be subject to the reasonable approval of the Indemnitee, on behalf of the Indemnitee (with full right of subrogation to the Indemnitee’s rights and defenses). Lessee must indicate its election to assume such defense by written notice to Lesseethe Indemnitee within thirty (30) days following receipt of Indemnitee’s notice of the Claim, so inform Lessee, and or in the case of a third- party claim which requires a shorter time for response then within such shorter period as specified in the Indemnitee’s notice of Claim; provided that such Indemnitee shall take no action for as long has given the Lessee notice thereof. If the Lessee denies liability or fails to respond to the notice within the time period set forth above, the Indemnitee may defend or compromise the Claim as it is legally able deems appropriate without prejudice to do so (it being understood that an Indemnitee shall be entitled to pay any of Indemnitee’s rights hereunder. If the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed elected to keep assume the defense of any such information confidential other than to Claim, then upon the extent necessary in order to contest request of the claimLessee, the Indemnitee requesting payment of indemnity under Section 7.1(a) shall promptly furnish the Lessee with copies of any requests for information from records or documents pertaining to the matter to be indemnified and, to the extent known by such Indemnitee, a reasonably detailed explanation of the circumstances giving rise to the claim of indemnification and the determination of the amount of the requested indemnity payment. Upon payment in full to Indemnitee of any taxing authority relating indemnity pursuant to Section 7.1(a), the Lessee shall be subrogated to any right of Indemnitee in respect of the matter against which such Taxes with respect to which Lessee may be required to indemnify hereunderindemnity has been paid. If requested by the Lessee in writing within 30 days after its receipt shall have elected to assume the defense of any such noticeClaim, such upon the written request at any time and from time to time of the Lessee, Indemnitee shall, at the expense of the Lessee, take such reasonable actions and execute such documents as are necessary or reasonably appropriate to assist the Lessee (including all in the preservation and enforcement against third parties of the Lessee’s right of subrogation hereunder. The Indemnitee may employ separate counsel in any such Claim and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Indemnitee unless the Indemnitee and the Lessee shall have been advised by counsel that there exists an irresolvable conflict of interest in such counsel’s representation of the Indemnitee and the Lessee in which case the fees and expenses of such separate counsel shall be for the account of the Lessee. All reasonable out-of-pocket costs fees and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee expenses shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with periodically as incurred. So long as no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contestcontinuing, the amount Lessee shall not be liable for any settlement of any such Claim effected without its consent unless the Lessee shall fail to, or elect in writing not to, assume the defense thereof in which case the Indemnitee, without waiving any rights to indemnification hereunder, may defend such Claim and enter into any good faith settlement thereof without the prior written consent of the Tax being contestedLessee. Lessee shall not, plus without the prior written consent (not to be unreasonably withheld) of the Indemnitee, effect any interest settlement of any such Claim unless such settlement includes an unconditional release of the Indemnitee from all liabilities that are the subject of such Claim. The parties agree to cooperate in any defense or settlement of any such Claim and penalties and an amount estimated in good faith by such Indemnitee for to give each other reasonable expenses, and (E) access to all information relevant thereto subject to appropriate confidentiality agreements. The parties will similarly cooperate in the case prosecution of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee or lawsuit against any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxthird party.
Appears in 5 contracts
Sources: Participation Agreement, Participation Agreement, Participation Agreement
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a Investor agrees to give written notice to Company Parent of such proceeding) for Taxes as the receipt of any written notice by the Company, Investor or any of Investor’s Affiliates which involves the assertion of any claim, or the commencement of any Action, in respect of which an indemnity may be sought by Investor pursuant to which Lessee could be liable for payment or indemnity this Article VI (a “Tax Claim”); provided, that failure to comply with this provision shall not affect Investor’s right to indemnification hereunder, except to the extent Company Parent is prejudiced by Investor’s failure to provide the requisite notice. Company Parent shall have the right, at its own expense, to elect in writing, within twenty days of receiving notice of any Tax Claim with respect to any material Pre-Agreement Taxes to control the contest or if an Indemnitee makes a determination that a resolution of any such Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (Claim; provided, however, that for any such Tax Claim that could result in any Loss to Investor or the failure to provide such notice Company for any Post-Agreement Tax Period: (a) Company Parent shall not affect Lessee's obligations hereunder to keep Investor fully and timely informed of the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt progress of such notice by LesseeTax Claim; provided, however, that, if such Indemnitee (b) Company Parent shall be required by law permit Investor to take action prior review and comment on all written submissions made to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest any administrative or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act judicial body in connection with paying the such Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including Claim and attend all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of relating to each such Taxes by Tax Claim; and (Xc) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee Company Parent shall not be required permitted to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim such Tax Claim without the prior written consent of Lessee Investor (except as contemplated by which consent shall not be unreasonably withheld or delayed). If Company Parent fails within the twenty day period described in this Section 6(b)(iv)). Notwithstanding the foregoing6.5 to respond to any notice of a Tax Claim, or fails to participate in any contest of a Tax Claim, in no event shall an Indemnitee be required either case which Company Parent has the right to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee control pursuant to this Section 6(b) without 6.5, then Investor shall control the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid contest or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition resolution of any Tax and Claim; provided, however, that Investor shall obtain the prior written consent of Company Parent (which consent shall not be permitted unreasonably withheld or delayed) before entering into any settlement of any such Tax Claim or ceasing to settle or compromise any claim without Lessee's consent if defend such Indemnitee (A) Tax Claim; and, provided further, that Company Parent shall waive its have the continuing right to indemnity under this Section 6(b)participate in the contest of such Tax Claim and Investor shall take in good faith all comments reasonably made by Company Parent into consideration. In any contest of a Tax Claim, with respect each party shall bear its own costs and expenses related to such Tax (contest; provided, that Company Parent shall bear all such costs and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced expenses that are indemnifiable by Lessee Company Parent pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax6.3 hereof.
Appears in 3 contracts
Sources: Investment Agreement (Ascend Wellness Holdings, LLC), Investment Agreement (MedMen Enterprises, Inc.), Investment Agreement
Contests. If a written claim is made against an a Tax Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as with respect to which Lessee could be is liable for a payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunderunder this Lease, such Tax Indemnitee shall will promptly give Lessee notice in writing of such claim (providedclaim; PROVIDED, howeverHOWEVER, that the such Tax Indemnitee's failure to provide give notice will not relieve Lessee of its obligations hereunder except to the extent that such notice shall not affect failure actually or effectively (i) results in the imposition of penalties or interest by the applicable taxation authority or (ii) has a material adverse impact upon Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claimTaxes in accordance with this Section 1.03. So long as (i) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt a contest of such notice Taxes does not involve any material danger of the sale, forfeiture, seizure or loss of the Aircraft or any interest therein (except if the Lessee shall have adequately bonded any Lien that results in such risk or otherwise made adequate provision to protect the interests of the Tax Indemnitees), (ii) adequate reserves have been provided for such Taxes by Lessee; provided, however, thatLessee or, if such Indemnitee shall be required by law to take action prior to applicable law, an adequate bond has been posted, (iii) in the end of such 30-day period, such event the Tax Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled decides after consultation with the Lessee to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) contest, the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than provided to the extent necessary Tax Indemnitee an interest-free advance in order an amount equal to the Tax which the Tax Indemnitee is required to pay, and (iv) no Event of Default described in clauses (a), (b), (g), (h), (i), or (j) of Section 17.01 of the Lease shall have occurred and be continuing, then such Tax Indemnitee at Lessee's written request will in good faith, with due diligence and at Lessee's expense (including paying the reasonable legal and accounting fees of such Tax Indemnitee), contest (or permit Lessee to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, own name if permitted by applicable law, allow Lessee to contestLaw or in the name and on behalf of such Tax Indemnitee) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxTaxes.
Appears in 3 contracts
Sources: Aircraft Purchase Agreement (Republic Airways Holdings Inc), Aircraft Purchase Agreement (Republic Airways Holdings Inc), Aircraft Purchase Agreement (Republic Airways Holdings Inc)
Contests. If Whenever any Taxing Authority asserts a written claim claim, makes an assessment, or otherwise disputes the amount of Taxes for which Seller, and not Purchaser, is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice liable under this Agreement, Purchaser shall upon receipt of such proceedingassertion, promptly, but in no event more than twenty (20) for Taxes as to which Lessee could be liable for payment or indemnity hereunderBusiness Days from such receipt, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice inform Seller in writing of such claim (provided, however, that the failure to provide such notice and Seller shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect have the right to contest control any resulting proceedings and to determine whether and when to settle any such claim, assessment or dispute to the extent such proceedings or determinations affect the amount of Taxes for which Seller may be liable under this Agreement and does not materially affect the amount for which Purchaser is liable under this Agreement. Whenever any Taxing Authority asserts a claim, makes an assessment or otherwise disputes the amount of Taxes for which Purchaser, and not Seller, is liable under this Agreement, Purchaser shall have the right to control any resulting proceedings and to determine whether and when to settle any such claim, assessment or dispute, except to the extent such proceedings affect the amount of Taxes for which Seller is liable under this Agreement. Whenever any Taxing Authority asserts a claim, makes an assessment or otherwise disputes the amount of Taxes for which both Seller and Purchaser may be liable, (i) each such Party may participate in any resulting proceedings, (ii) the proceedings shall be controlled by the Party that would bear the burden of the greater portion of the sum of the adjustment and any corresponding adjustments that may reasonably be anticipated for future taxable periods and (iii) neither Party shall not take any action with respect to such claim or Tax settle the proceedings without the consent of Lessee for 30 days following the receipt of such notice by Lessee; providedother Party, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue unreasonably withheld, conditioned or delayed, provided however, that when an amount in dispute is $250,000 or less, the Party that would bear the burden of the greater portion of the sum of the adjustment and any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding corresponding adjustments that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of may reasonably be anticipated for future taxable periods may settle any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case on behalf of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim both Parties without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by Party if the Owner Participant Party bearing the greater burden obtains a Tax Opinion, on which both Parties may rely, to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) the effect that the settlement is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims reasonable based on the outcome facts and circumstances of the issue which is the basis of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxproceeding.
Appears in 3 contracts
Sources: Equity and Asset Purchase Agreement (Ardagh Finance Holdings S.A.), Equity and Asset Purchase Agreement (Ball Corp), Equity and Asset Purchase Agreement
Contests. If any claim for a written claim Liability is made against an Borrower or any Indemnitee or if any proceeding is commenced against an Indemnitee (including a written and such party has received notice thereof, such party receiving notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee Liability shall promptly give Lessee notice in writing of such claim (notify all affected Indemnitees or Borrower, as the case may be, provided, however, that the failure to provide such notice promptly or to notify Borrower shall not affect Lessee's release Borrower from any of its obligations hereunder to indemnify hereunder, except to the Owner Participant unless extent that such failure adversely affects any applicable defense or counterclaim, or otherwise increases the amount Borrower would have been liable for in the absence of such failure. If no Specified Default shall materially adversely affect exist, Borrower shall have the right to contest such claim) investigate and shall not take any action with respect defend or (so long as Borrower has acknowledged in writing to the relevant Indemnitee that Borrower is liable to such claim or Tax without the consent of Lessee Indemnitee for 30 days following the receipt of such notice by Lessee; providedLiability), however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action compromise any Liability for as long as which it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticeunder this Section 9.01, such and each Indemnitee shall, at the expense of Lessee (including agrees to cooperate with all reasonable out-of-pocket costs and reasonable attorney and accountants fees)requests of Borrower in connection therewith. Notwithstanding any of the foregoing to the contrary, in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee Borrower shall not be required entitled to pursue assume responsibility for and control of any appeals to such judicial or administrative proceedings or compromise any Liability if (aa) any Specified Default shall exist, or (bb) such proceedings would involve the United States Supreme Court. If and to the extent the imposition of criminal liability on an Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents withoutif such contest will, in the good faith judgment reasonable opinion of such Indemnitee, adversely affecting be inappropriate under applicable standards of professional conduct. The reasonable fees and expenses of such Indemnitee, such Indemnitee ’s counsel shall permit Lessee to control be paid by Borrower if any of the conduct of any such proceeding and shall provide to Lessee such information circumstances described in clauses (aa) or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest(bb) above exists. An Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Borrower pursuant to the preceding provisions. Each Indemnitee shall not fail cooperate with all reasonable requests of the insurers in the exercise of their rights to take any action expressly investigate, defend, or compromise such claim as may be required by such policy to maintain the insurance coverage provided to the parties thereunder. To the extent that any Indemnitee receives indemnification payments under this Section 6(b)(iv) (including9.01, without limitation, any action regarding any appeal of an adverse determination Borrower shall be subrogated to such Indemnitee’s rights with respect to any claim) the transaction or settle event requiring or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required giving rise to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (indemnity to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any indemnity payment made, other than to any insurance policies maintained by such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 3 contracts
Sources: Credit Agreement (Mesa Air Group Inc), Credit Agreement (Mesa Air Group Inc), Credit Agreement (Mesa Air Group Inc)
Contests. If a written any claim is shall be made against an any Indemnitee or if any proceeding is shall be commenced against an any Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could reasonably may have an indemnity obligation hereunderpursuant to this Section 11.2, or if any Indemnitee reasonably shall determine that any Imposition for which Lessee may have an indemnity obligation pursuant to this Section 11.2 may be payable, such Indemnitee shall promptly give (and in any event, within 30 days) notify Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify Lessee within 30 days shall not affect Lessee's obligations alter such Indemnitee’s rights under this Section 11.2, except to the extent such failure precludes or materially adversely affects the ability to conduct a contest of any indemnified Imposition, in which case Lessee shall have no indemnification obligation hereunder to the Owner Participant unless extent such failure shall precludes or materially adversely affect the right affects their ability to contest such claimconduct a contest) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Indemnitee shall, shall in such notice to Lessee, so inform Lessee, and such Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by Lessee, unless the Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period. Lessee shall be entitled for a period if of 30 days from receipt of such notice from the Indemnitee (A)(Ior such shorter period as the Indemnitee has notified Lessee is required by law or regulation for the Indemnitee to commence such contest), to request in writing that such Indemnitee contest in good faith of such Imposition, at Lessee’s expense. If (x) such contest can be pursued in the name of Lessee and independently from any other proceeding involving an Imposition for which Lessee has not agreed to indemnify such Indemnitee, (y) such contest must be pursued in the name of the Indemnitee, but can be pursued independently from any other proceeding involving an Imposition for which Lessee has not agreed to indemnify such Indemnitee or (z) the failure Indemnitee so requests, then Lessee shall be permitted to so pay control the Tax would result contest of such claim, provided that in substantial penalties the case of a contest described in any of clause (unless immediately reimbursed by Lesseex), (y) and the act of paying the Tax would not prejudice the right to contest or (IIz) if the failure Indemnitee determines in good faith that such contest by Lessee reasonably could have a material adverse impact on the business or operations of the Indemnitee and provides a written explanation to so pay would result in criminal penalties and (B) Lessee of such determination, the Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial may elect to the pursuit control or reassert control of the contest, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and; provided, further, that in determining the application of clauses (x) and (y). In addition, such each Indemnitee shall (provided that Lessee shall have agreed take any and all reasonable steps to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of segregate claims for any requests Impositions for information from any taxing authority relating to such Taxes with respect to which Lessee may be required indemnifies hereunder from Impositions for which Lessee is not obligated to indemnify hereunder, so that Lessee can control the contest of the former. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including In all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If other claims requested to do so be contested by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that control the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment contest of such Indemniteeclaim, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee acting through counsel reasonably acceptable to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contestLessee. In the case of a any contest controlled by an Indemnitee, the Indemnitee shall conduct such contest in good faith. In no event shall Lessee be permitted to contest (or the Indemnitee required to contest) any claim (A) if such Indemnitee provides Lessee with a legal opinion of independent counsel that such action, suit or proceeding involves a material risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Item or Items of Equipment or any part thereof or any other Lessee Collateral unless Lessee shall consult with have posted and maintained a bond or other security reasonably satisfactory to the relevant Indemnitee in respect to such risk, (B) if a Lease Event of Default has occurred and is continuing, unless Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Indemnitee in good faith regarding respect of the manner of contesting Impositions subject to such claim and shall keep any and all expenses for which Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) Lessee shall have agreed to pay and shall pay to such Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Indemnitee shall may incur in connection with contesting such claimImposition, including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Impositions prior to the commencement of such contest on contest, unless Lessee shall provide to the Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs (including Taxes) to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee). In addition, for Indemnitee-controlled contests and claims contested in the name of the Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Indemnitee for which Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv)11.2) is at least exceeds $3,000. Notwithstanding the foregoing75,000 and (B) unless, if any requested by the Indemnitee, the Lessee shall have provided to the Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable an opinion of counsel selected by Lessee pursuant that a reasonable basis exists to this Section 6(bcontest such claim. In no event shall an Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Impositions (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgment; provided, however, that if the Indemnitee is the controlling party, no settlement offer with respect to such claims shall be made or accepted by the Indemnitee without the written permission prior consent of Lesseethe Lessee (which consent shall not unreasonably be withheld); provided further, Lessee's obligation that if the Indemnitee is the controlling party and Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Agency and such Indemnitee rejects such settlement offer then the amount for which Lessee will be required to indemnify such Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agent or taxing authority to the controlling party thereof, in connection with such claim (or the contest thereof. Each Indemnitee shall supply Lessee with such information and all directly related claims and claims based on documents reasonably requested by Lessee as is necessary or advisable for Lessee to participate in any action, suit or proceeding to the outcome of such claim) shall terminate, subject to extent permitted by this Section 6(b)(iv11.2(b), and subject Lessee shall promptly reimburse such Indemnitee for the reasonable out-of-pocket expenses of supplying such information and documents. No Indemnitee shall enter into any settlement or other compromise or fail to appeal an adverse ruling with respect to any claim which is entitled to be indemnified under this Section 6(b)(iii11.2 (and with respect to which contest is required under this Section 11.2(b)) without the prior written consent of Lessee (such consent not to be unreasonably withheld), unless such Indemnitee shall repay waives its right to Lessee any amount previously paid or advanced to such Indemnitee be indemnified under this Section 11.2 with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b)herein to the contrary, an Indemnitee will not be required to contest the imposition of any Tax (and Lessee shall not be permitted to settle or compromise contest) a claim with respect to any claim without Lessee's consent Imposition if (i) such Indemnitee (A) shall waive its right to indemnity indemnification under this Section 6(b), 11.2 with respect to such Tax claim (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Taxyear or any other taxable year, plus interest at the rate that would have contest of which is materially adversely affected as a result of such waiver) or (ii) such Imposition is the sole result of a claim of a continuing and consistent nature, which claim has previously been payable by resolved against the relevant taxing authority with respect Indemnitee (unless a change in law or facts has occurred since such prior adverse resolution and Lessee provides an opinion of independent tax counsel to the effect that it is more likely than not that such change in law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
Appears in 2 contracts
Sources: Lease and Security Agreement (Lsi Logic Corp), Lease and Security Agreement (Lsi Logic Corp)
Contests. If a written any claim is shall be made against an any Indemnitee or if any proceeding is shall be commenced against an any Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 26.4, or if any Indemnitee shall reasonably determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 26.4 may be payable, such Indemnitee shall promptly give (and in any event, within thirty (30) days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within thirty (30) days shall not affect Lesseealter such Indemnitee's obligations hereunder rights under this Section 26.4 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Lessee unless the Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period. The Lessee shall be entitled for a period if of thirty (A)(I30) days from receipt of such notice from the Indemnitee (or such shorter period as the Indemnitee has notified the Lessee is required by law or regulation for the Indemnitee to commence such contest), to request in writing that such Indemnitee contest the imposition of such Tax, at the Lessee's expense. If (x) such contest can be pursued in the name of the Lessee and independently from any other proceeding involving a Tax liability of such Indemnitee for which the Lessee has not agreed to indemnify such Indemnitee, (y) such contest must be pursued in the name of the Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Indemnitee for which the Lessee has not agreed to indemnify such Indemnitee or (z) the failure Indemnitee so requests, then the Lessee shall be permitted to so pay control the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act contest of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax claim, provided that in the manner case of a contest described in clause (y), if the Indemnitee determines in good faith that is such contest by the least prejudicial Lessee could have a material adverse impact on the business or operations of the Indemnitee and provides a written explanation to the pursuit Lessee of such determination, the Indemnitee may elect to control or reassert control of the contest). In addition, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of the preceding sentence, each Indemnitee shall (provided that take any and all reasonable steps to segregate claims for any Taxes for which the Lessee shall have agreed to keep such information confidential other than to indemnifies hereunder from Taxes for which the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including In all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If other claims requested to do so be contested by the Lessee, the Indemnitee shall appeal any adverse administrative control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or judicial decision, except that the Indemnitee shall not be required to pursue contest) any appeals claim, (A) if such Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the United States Supreme Court. If Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Asset or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security satisfactory to the extent relevant Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing under Section 20.1(a), (f) or (g) unless the Indemnitee is able to separate the contested issue Lessee shall have posted and maintained a bond or issues from other issues arising in the same administrative or judicial proceeding that are unrelated security satisfactory to the transactions contemplated by relevant Indemnitee in respect of the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee Taxes subject to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee). In addition, for Indemnitee controlled contests and claims contested in the name of the Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv26.4(b)) is at least exceeds $3,000. Notwithstanding the foregoing50,000 and (B) unless, if any requested by the Indemnitee, the Lessee shall have provided to the Indemnitee shall release, waive, compromise or settle any claim an opinion of counsel selected by the Lessee (which may be indemnifiable in-house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by the Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall an Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions are to be taken shall be made by the controlling party in its sole judgement, provided, however, that if the Indemnitee is the controlling party and the Lessee pursuant to this Section 6(b) without recommends the written permission acceptance of Lessee, Lessee's obligation a settlement offer made by the relevant Governmental Authority and such Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Indemnitee shall at the Lessee's expense supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 26.4(b). No Indemnitee shall enter into any settlement or other compromise or fail to appeal an adverse ruling with respect to any claim which is entitled to be indemnified under this Section 26.4 (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject with respect to which contest is required under this Section 6(b)(iv26.4(b)) without the prior written consent of the Lessee, and subject to Section 6(b)(iii), unless such Indemnitee shall repay waives its right to Lessee any amount previously paid or advanced to such Indemnitee be indemnified under this Section 26.4 with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b)herein to the contrary, an Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity indemnification under this Section 6(b), 26.4 with respect to such Tax claim (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to contest of which is materially adversely affected as a refund result of such Taxwaiver).
Appears in 2 contracts
Sources: Master Lease and Security Agreement (Rite Aid Corp), Master Lease and Security Agreement (Rite Aid Corp)
Contests. If a written claim is made against an Indemnitee or if (a) After the Closing, Purchaser shall promptly notify Sellers in writing of any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) a proposed assessment or claim in an audit or administrative or judicial proceeding of Purchaser or the Company which, if determined adversely to the taxpayer, would be grounds for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (indemnification under this Article IX; provided, however, that the failure to provide give such written notice shall will not affect Lessee's obligations hereunder Purchaser’s right to indemnification under this Article IX except to the Owner Participant unless such extent, if any, that Purchaser’s failure to so notify Sellers precludes Sellers from contesting the Tax in question.
(b) In the case of an audit or administrative or judicial proceeding that relates to periods ending on or before the Closing Date, Sellers shall materially adversely affect have the right at their expense to contest such claim) participate in and shall not take any action with respect to such claim or Tax without control the consent of Lessee for 30 days following the receipt conduct of such notice by Lesseeaudit or proceeding; provided, however, thatPurchaser may participate in any such audit or proceeding at its sole cost and expense and, if Sellers do not assume the defense of any such Indemnitee audit or proceeding, Purchaser may defend the same in such manner as it may deem appropriate, including, but not limited to, settling such audit or proceeding after five (5) Business Days prior written notice to Sellers setting forth the terms and conditions of settlement. The parties will work together to resolve any disputes should Sellers timely object to any settlement proposed by the Purchaser.
(c) With respect to issues relating to a potential adjustment for which both Sellers and Purchaser or the Company could be liable, (i) each party may participate in the audit or proceedings, and (ii) the audit or proceedings shall be required controlled by law that party which would bear the burden of the greater portion of the sum of the adjustment and any corresponding adjustments that may reasonably be anticipated for future Tax periods. The principle set forth in the immediately preceding sentence shall govern also for purposes of deciding any issue that must be decided jointly (including choice of judicial forum) in situations in which separate issues are otherwise controlled under this Article IX by Purchaser and Sellers.
(d) Neither Purchaser nor Sellers shall enter into any compromise or agree to take action prior settle any claim pursuant to any Tax audit or proceeding which would adversely affect the end other party for such year or a subsequent year without the written consent of such 30-day periodthe other party, such Indemnitee shall, in such notice to Lessee, so inform Lesseewhich consent may not be unreasonably withheld or delayed. Purchaser and Sellers shall cooperate, and such Indemnitee Purchaser shall take no action for as long as it is legally able cause the Company to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents withoutcooperate, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct defense against or compromise of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale audit or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxproceeding.
Appears in 2 contracts
Sources: Purchase Agreement (Viewpoint Corp), Purchase Agreement (Viewpoint Corp)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within thirty (30) days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within thirty (30) days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any Impositions) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform Lessee, the Lessee and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-ten (10) day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimbe entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticenotice from such Tax Indemnitee (or such shorter period as such Tax Indemnitee has notified the Lessee is required by law or regulation for such Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of such Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if such Tax Indemnitee so requests, then the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), if such Tax Indemnitee shall consult with Lessee determines reasonably and in good faith regarding that such contest by the manner of contesting such claim and shall keep Lessee reasonably informed regarding could have a material adverse impact on the progress business or operations of such Tax Indemnitee and provides a written explanation to the Lessee of such determination, such Tax Indemnitee may elect to control or reassert control of the contest. An , and provided that by taking control of the contest, the Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) above, each Tax Indemnitee shall not fail to take any action expressly and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, such Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or such Tax Indemnitee required by this Section 6(b)(ivto contest) any claim, (includingA) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, without limitationsuit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any action regarding Lien (other than a Permitted Lien) on the Property or any appeal of an adverse determination part thereof unless, with respect to any claimcivil liability only, the Lessee shall have agreed in writing to be responsible for such risk, (B) or settle or compromise any claim without the prior written consent if an Event of Lessee Default has occurred and is continuing, (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of contest, unless the Lessee shall provide to such contest on Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition for Tax Indemnitee controlled contests and claims contested in the name of such Tax Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with in any audit involving any or all of the other Aircraft leased by the Owner Participant such Tax Indemnitees with respect to Lessee or raised in any other audit period for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.5(b)) exceeds $100,000 and (B) unless, if requested by such Tax Indemnitee, the Lessee shall have provided to such Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions are to be taken shall be made by the controlling party in its sole judgment, provided, however, that if such Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) and reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall, at least $3,000the Lessee's expense, supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 13.5(b). Notwithstanding anything in this Section 13.5(b) to the foregoingcontrary, if any no Tax Indemnitee shall release, waive, enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.5 (and with respect to which contest is required under this Section 13.5(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.5 with respect to such claim pursuant to the next paragraph. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest or continue to contest (and the Lessee shall not be permitted to contest or continue to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 13.5 with respect to such claim (and all directly related claims and claims based on any claim with respect to such year or any other taxable year the outcome contest of which is materially adversely affected as a result of such claimwaiver) shall terminate, subject and returns to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to the Lessee any amount all amounts previously paid or advanced to such the Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 2 contracts
Sources: Participation Agreement (Mondavi Robert Corp), Participation Agreement (Mondavi Robert Corp)
Contests. If Whenever any Taxing Authority asserts a written claim is made against claim, makes an Indemnitee assessment, or if any proceeding is commenced against an Indemnitee otherwise disputes the amount of Taxes for which Seller may reasonably be expected to be liable under this Agreement (including a written “Tax Claim”), Purchaser shall upon receipt of notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunderTax Claim, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice inform Seller in writing of such claim (writing; provided, however, that the failure to provide give such notice as provided herein shall not affect Lessee's relieve Seller of its obligations hereunder under this Article V except to the Owner Participant unless such failure extent that Seller is materially prejudiced thereby. Seller shall materially adversely affect have the right to contest such claim) and shall not take elect to control the defense of any action Tax Claim relating to taxable periods ending on or before the Closing Date, or otherwise relating to Taxes for which Seller may be liable under this Agreement (other than with respect to such claim or Tax without the consent a Straddle Period), at its sole cost and expense by written notice to Purchaser within ten (10) days of Lessee for 30 days following the receipt of notice thereof; provided, however, that Purchaser may, at its sole cost and expense, retain separate counsel of its choosing to participate in the defense or settlement of such notice Tax Claim by LesseeSeller. If Seller timely elects to control the defense of any such Tax Claim in accordance with this Section 5.06, (i) Seller shall keep Purchaser reasonably apprised of the status of the Tax Claim and the defense thereof and shall reasonably consider recommendations made by Purchaser with respect thereto and (ii) Purchaser shall have the right to consent, which consent may not be unreasonably withheld, conditioned or delayed, to any settlement to the extent such settlement would affect the amount of Taxes for which Purchaser or its Affiliates may be liable for taxable periods ending after the Closing Date. If Seller elects not to control the defense or thereafter fails or ceases to defend any such Tax Claim, Purchaser shall have the right to control the defense of such Tax Claims at its sole cost and expense, and Seller shall have the right to consent, which consent may not be unreasonably withheld, conditioned or delayed, to any settlement thereof to the extent such settlement would affect the amount of Taxes for which Seller may be liable under this Agreement. Except as otherwise required by the foregoing provisions of this Section 5.06, Purchaser shall have the right to control any proceedings relating to Taxes of or with respect to the Company or any of its Subsidiaries; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority Tax Claim with respect to a refund Straddle Period, Seller shall be entitled to participate in such proceeding (at its sole cost and expense) to the extent such Tax Claim is related to the portion of such Tax. Notwithstanding anything contained in this Section 6(b)Straddle Period that is a Pre-Closing Tax Period, an Indemnitee will and Purchaser shall not settle such portion of such Tax Claim without the Seller’s consent, which consent may not be required to contest the imposition of any Tax and shall be permitted to settle unreasonably withheld, conditioned or compromise any claim without Lessee's consent delayed, if such Indemnitee (A) shall waive its right to indemnity settlement would affect the amount of Taxes for which Seller may be liable under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxAgreement.
Appears in 2 contracts
Sources: Membership Interest Purchase Agreement (Steel Dynamics Inc), Membership Interest Purchase Agreement (Ak Steel Holding Corp)
Contests. If a written claim is made against In respect of the indemnification provided under Section 11.1(a), promptly after receipt by an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written of notice of such proceeding) for Taxes as to which Lessee could be liable for payment any pending or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunderthreatened Claim, such Indemnitee shall promptly shall, if a claim for indemnification in respect thereof is to be made against Lessee give Lessee written notice in writing of such claim (provided, however, thereof to Lessee; provided that the failure to provide such prompt notice shall not affect limit Lessee's ’s obligations hereunder to the Owner Participant unless or prejudice any rights of such failure shall materially adversely affect the right to contest such claimIndemnitee under Section 11.1(a) and shall not take any action with respect to such claim or Tax without Claim, except to the consent extent that such failure to provide prompt notice adversely affects Lessee’s indemnification obligations hereunder. So long as no Lease Event of Default is continuing, Lessee for at its own expense, may elect to assume the defense of any such Claim through its own counsel, which shall be subject to the reasonable approval of the Indemnitee, on behalf of the Indemnitee (with full right of subrogation to the Indemnitee’s rights and defenses). Lessee must indicate its election to assume such defense by written notice to the Indemnitee within 30 days following the receipt of Indemnitee’s notice of the Claim, or in the case of a third party claim which requires a shorter time for response then within such shorter period as specified in the Indemnitee’s notice by Lesseeof Claim; provided, however, that, if provided that such Indemnitee shall be required by law has given Lessee notice thereof. If Lessee denies liability or fails to take action prior respond to the end of such 30-day periodnotice within the time period set forth above, such the Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long may defend or compromise the Claim as it is legally able deems appropriate without prejudice to do so (it being understood that an Indemnitee shall be entitled any of Indemnitee’s rights hereunder and with no further obligation to pay inform Lessee of the Tax claimed status of the Claim and ▇▇▇ for a refund prior no right of Lessee to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest approve or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act disapprove any actions taken in connection with paying therewith by the Tax in the manner that is the least prejudicial to the pursuit of the contest)Indemnitee. In addition, such Indemnitee shall (provided that If Lessee shall have agreed elected to keep assume the defense of any such information confidential other than to Claim, then upon the extent necessary in order to contest request of Lessee, the claimIndemnitee requesting payment of indemnity under Section 11.1(a) shall promptly furnish Lessee with copies of any requests for information from records or documents pertaining to the matter to be indemnified and, to the extent known by such Indemnitee, a reasonably detailed explanation of the circumstances giving rise to the claim of indemnification and the determination of the amount of the requested indemnity payment. Upon payment in full to Indemnitee of any taxing authority relating indemnity pursuant to Section 11.1(a), Lessee shall be subrogated to any right of Indemnitee in respect of the matter against which such Taxes with respect to which Lessee may be required to indemnify hereunderindemnity has been paid. If requested by Lessee in writing within 30 days after its receipt shall have elected to assume the defense of any such noticeClaim, such upon the written request at any time and from time to time of Lessee, Indemnitee shall, at the expense of Lessee, take such reasonable actions and execute such documents as are necessary or reasonably appropriate to assist Lessee (including all reasonable out-of-pocket costs in the preservation and reasonable attorney enforcement against third parties of Lessee’s right of subrogation hereunder. The Indemnitee may employ separate counsel in any such Claim and accountants fees)participate in the defense thereof, in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative but the fees and judicial proceedings the validity, applicability or amount expenses of such Taxes by (X) resisting payment thereof, (Y) not paying counsel shall be at the same except under protest if protest is necessary and proper or (Z) if expense of the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, Indemnitee unless the Indemnitee shall appeal any adverse administrative or judicial decision, except have been advised by its counsel that a conflict of interest exists in Lessee’s counsel’s representations of the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents withoutLessee, in which case the good faith judgment fees and expenses of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee ’s counsel shall permit Lessee to control be for the conduct account of any such proceeding Lessee. All fees and expenses shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) periodically as incurred. So long as no Lease Event of Default shall have occurred and be continuing at the time the contest is begun continuing, Lessee shall not be liable for any settlement of any such Claim effected without its consent unless Lessee has provided security for its obligations hereunder by advancing shall fail to, or elect in writing not to, assume the defense thereof in which case the Indemnitee, without waiving any rights to indemnification hereunder, may defend such Indemnitee before proceeding with such contestClaim and enter into any good faith settlement thereof without the prior written consent of Lessee. Lessee shall not, without the amount prior written consent (not to be unreasonably withheld) of the Tax being contestedIndemnitee, plus effect any interest settlement of any such Claim unless such settlement includes an unconditional release of the Indemnitee from all liabilities that are the subject of such Claim. The parties agree to cooperate in any defense or settlement of any such Claim and penalties and an amount estimated in good faith by such Indemnitee for to give each other reasonable expenses, and (E) access to all information relevant thereto subject to appropriate confidentiality agreements. The parties will similarly cooperate in the case prosecution of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee or lawsuit against any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxthird party.
Appears in 2 contracts
Sources: Lease and Security Agreement (Lsi Logic Corp), Lease and Security Agreement (Lsi Logic Corp)
Contests. If a written claim is made against In respect of the indemnification provided under Section 7.1(a), promptly after receipt by an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written of notice of such proceeding) for Taxes as to which Lessee could be liable for payment any pending or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day periodthreatened Claim, such Indemnitee shall, if a claim for indemnification in respect thereof is to be made against the Lessee, give written notice thereof to the Lessee. So long as no Event of Default has occurred and is continuing, the Lessee, at its own expense, may elect to assume the defense of any such Claim through its own counsel, which shall be subject to the reasonable approval of the Indemnitee, on behalf of the Indemnitee (with full right of subrogation to the Indemnitee’s rights and defenses). The Lessee must indicate its election to assume such defense by written notice to Lesseethe Indemnitee within thirty (30) days following receipt of Indemnitee’s notice of the Claim, so inform Lessee, and or in the case of a third-party claim which requires a shorter time for response then within such shorter period as specified in the Indemnitee’s notice of Claim; provided that such Indemnitee shall take no action for as long has given the Lessee written notice thereof. If the Lessee denies liability or fails to respond to the notice within the time period set forth above, the Indemnitee may defend or compromise the Claim as it is legally able deems appropriate without prejudice to do so (it being understood that an Indemnitee shall be entitled to pay any of Indemnitee’s rights hereunder. If the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed elected to keep assume the defense of any such information confidential other than to Claim, then upon the extent necessary in order to contest request of the claimLessee, the Indemnitee requesting payment of indemnity under Section 7.1(a) shall promptly furnish the Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability records or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals documents pertaining to the United States Supreme Court. If and matter to be indemnified and, to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated known by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is a reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment detailed explanation of the claim, Lessee shall advance the amount thereof plus (circumstances giving rise to the extent indemnified hereunder) interest, penalties claim of indemnification and additions to tax with respect thereto that are required to be paid prior to the commencement determination of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus requested indemnity payment. Upon payment in full to Indemnitee of any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemniteeindemnity pursuant to Section 7.1(a), the aggregate amount Lessee shall be subrogated to any right of Indemnitee in respect of the claim (together with matter against which such indemnity has been paid. If the amount Lessee shall have elected to assume the defense of all similar or logically related claims that have been or could be raised with any or all such Claim, upon the written request at any time and from time to time of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.Indemnitee
Appears in 2 contracts
Sources: Participation Agreement (Big Lots Inc), Participation Agreement (Big Lots Inc)
Contests. If a written any claim is shall be made against an any Tax Indemnitee -------- or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section ------- 26.5, or if any Tax Indemnitee shall determine that any Imposition to which ---- the Lessee may have an indemnity obligation pursuant to this Section 26.5 ------------ may be payable, such Tax Indemnitee shall promptly give (and in any event, within 30 days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so -------- notify the Lessee within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 26.5 except to the Owner Participant unless extent such failure shall precludes ------------ or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, that-------- ------- that in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), such if -------- ---------- the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee -------- acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that -------- ------- in determining the application of clauses (x) and (y) of the preceding ----------- --- sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien or Lessor Lien) on the Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on within ten (10) Business Days after demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv------- 26.5(b)) is at least exceeds $3,000. Notwithstanding the foregoing500,000 and (B) unless, if any requested by the Tax ------- Indemnitee, the Lessee shall have provided to the Tax Indemnitee shall release, waive, compromise or settle any claim an opinion of counsel selected by the Lessee (which may be indemnifiable in-house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement, provided, however, that if the Tax Indemnitee is the controlling party and -------- ------- the Lessee pursuant to this Section 6(b) without recommends the written permission acceptance of Lessee, Lessee's obligation a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim (or the contest thereof. Each Tax Indemnitee shall at the Lessee's expense supply the Lessee with such information and all directly related claims and claims based on documents reasonably requested by the outcome of such claim) shall terminateLessee as are necessary or advisable for the Lessee to participate in any action, subject suit or proceeding to the extent permitted by this Section 6(b)(iv26.5(b), and subject to Section 6(b)(iii), such . No Tax --------------- Indemnitee shall repay enter into any settlement or other compromise or fail to Lessee any amount previously paid or advanced to such Indemnitee appeal an adverse ruling with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority any claim which is entitled to be indemnified under this Section 26.5 (and with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be which contest is ------------ required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b26.5(b), with respect to such Tax (and any directly related claim and any claim ) without the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.prior ---------------
Appears in 2 contracts
Sources: Lease (Brookdale Living Communities Inc), Lease (Brookdale Living Communities Inc)
Contests. If a any written claim is made against an any Indemnitee or if any proceeding is commenced against an any Indemnitee (including a written notice of such proceeding) for any Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could Borrower may have an indemnity obligation hereunderpursuant to Section 9.02(a), such Indemnitee shall promptly give Lessee notice in writing notify Borrower of such claim within thirty (30) days after such Indemnitee receives notice of such claim or proceeding; provided, however, that the failure to provide such notice to Borrower shall not affect Lessee's obligations the obligation of Borrower to provide indemnity hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to the Taxes that are the subject of such claim or Tax without proceeding unless and except to the consent of Lessee extent that (i) such failure (whether by adversely affecting a counterclaim or defense, or otherwise) increases the amount for 30 days following which Borrower would have been liable in the receipt absence of such notice by Lesseefailure, or (ii) such failure results in the imposition of, or an increase in the amount of, any penalties, interest, or additions to Tax related to the Tax which is the subject of such claim or proceeding.
(a) reasonably satisfactory to such Indemnitee; provided, however, that, (y) if such the Indemnitee shall be required by law decides after consultation with Borrower to take action pay the Tax prior to the end of such 30contest, Borrower shall provide to the Indemnitee an interest-day period, such free advance in an amount equal to the Tax which the Indemnitee is required to pay and shall, in such notice case, pay any additional amount required to Lessee, so inform Lessee, and hold such Indemnitee shall take no action for as long as it harmless against any adverse Tax consequences arising from such advance (and if such contest is legally able to do so (it being understood that an Indemnitee shall be entitled to pay finally determined adversely, the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts advance shall be applied against Borrower’s obligation to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, indemnify the Indemnitee shall appeal any adverse administrative or judicial decision, except that against the Indemnitee shall not be required to pursue any appeals to Tax which is the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress subject of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv); and (z) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in involve any material risk of criminal liability on the Indemnitee or of a sale, forfeiture, sale or loss of any Engine Kit, or the Aircraft (unless Lessee shall have made provisions to protect the interests creation of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at Lien other than Liens for the time Taxes being contested unless Borrower posts a bond or other security reasonably satisfactory to the contest is begun unless Lessee has provided security for its obligations hereunder by advancing Indemnitee in respect to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and risk (E) other than in the case of a risk of criminal liability). Any contest that required pursuant to the preceding paragraph shall be conducted by Borrower in the name of Borrower, if permitted by law, with respect to (i) any claim which involves only Taxes or claims for which Borrower is being pursued by an required to indemnify hereunder, or (ii) any claim which can be segregated and contested separately without material adverse unindemnified consequences for such Indemnitee, provided, Borrower shall have acknowledged in writing its obligation to indemnify the aggregate amount applicable Indemnitee with respect to such contest without regard to the exclusions in Section 9.02(a)(i) through (xi). Any other contest shall be at the control and discretion of the Indemnitee. If Borrower satisfies the conditions imposed on it in this Section 9.02(b) and an Indemnitee nevertheless fails to contest and refuses to permit Borrower to contest under and as and to the extent required by this Section 9.02(b), then Borrower shall not be obligated to indemnify such Indemnitee for such claim (together or for any other claim for which a successful contest is adversely affected in any material respect because of such failure to contest or to permit a contest. In addition, the Indemnitee shall not settle, concede, or compromise any contest without Borrower’s prior written consent unless the Indemnitee forgoes its right to be indemnified for such claim, and any such settlement, concession, or compromise without the prior written consent of Borrower shall constitute a waiver of such Indemnitee’s rights to indemnification hereunder with respect to such claim and any other related claim for which a successful contest is adversely affected in any material respect because of such settlement, concession, or compromise. If the settlement proposal of a claim is acceptable to the Indemnitee but is unacceptable to Borrower, Borrower shall inform such Indemnitee of the amount for which Borrower would be willing to settle such claim and such Indemnitee may accept the settlement proposal; provided, that the amount of all similar or logically related claims that any indemnity payment which Borrower shall be required to pay to such Indemnitee under Section 9.02(a) in respect of such claim shall not exceed the amount for which Borrower would have been or could be raised with willing to settle such claim. Such Indemnitee shall promptly return such portion of any or all amounts (including any “gross up” paid thereon, but excluding the expense of contest), previously advanced by Borrower for the payment of the other Aircraft leased by Taxes which were the Owner Participant subject of the contest, as exceeds the amount to Lessee which Borrower did not withhold its consent. If Borrower notifies such Indemnitee that the settlement proposal is unacceptable to Borrower, the Indemnitee shall treat such notification as Borrower’s request that such Indemnitee contest such claim for Taxes, in which case Borrower’s and such Indemnitee’s rights and obligations with respect to such taxes shall be as provided in this Section 9.02(b) without regard to the settlement proposal. An Indemnitee will not be required to appeal any decision to the United States Supreme Court or raised any similar court in a jurisdiction outside the United States. If any other audit for which Lessee Indemnitee actually obtains a refund (or would have an indemnity obligation actually received such a refund but for offset by matters not indemnifiable by Borrower under this Section 6(b)(iv9.02(a)) is at least $3,000. Notwithstanding the foregoingof all or any part of any Tax paid or reimbursed by Borrower, if any such Indemnitee shall release, waive, compromise promptly pay to Borrower the amount equal to the lesser of (x) the amount of such refund (or settle the amount of such offset) plus any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify interest thereon (less any Taxes imposed on such Indemnitee with respect to such claim interest) received from the relevant taxing authority (or which would have been received with respect to the amount of such an offset) plus the amount of any Tax benefits realized by such Indemnitee as a result of such payment (and all directly related claims net of any net Tax detriment resulting from the receipt of the refund and claims based interest on the outcome of refund (after giving effect to such claim) shall terminate, subject Indemnitee’s obligations to make payments to Borrower under this Section 6(b)(ivsentence)), and subject (y) the sum of (i) such Tax payment by Borrower to Section 6(b)(iii), such Indemnitee shall repay to Lessee plus (ii) any amount previously paid or advanced to interest received by such Indemnitee with respect to such claimrefund or offset plus (iii) any other payment other than the expenses of the contest by Borrower to such Indemnitee theretofore made (and not theretofore repaid to Borrower) pursuant to this Section 9.02(b), plus interest at it being intended that such Indemnitee shall be entitled to a net tax benefit pursuant to this Section 9.02(b) only if Borrower has been reimbursed for any payments by it to such Indemnitee pursuant to this Section 9.02(b); provided, (a) such amount shall not be payable before such time as Borrower shall have made all payments or indemnities then due and owing to such Indemnitee by Borrower pursuant to the rate that would have been payable Basic Documents, (b) no Specified Default shall exist, and (c) the amount of such payment by the relevant taxing authority Indemnitee with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced indemnified by Lessee pursuant Borrower hereunder, together with all payments previously made to this Section 6(b) Borrower by the Indemnitee with respect to such Tax, plus interest at shall not exceed the rate that would have been payable aggregate amount paid by Borrower to the relevant Indemnitee with respect to such Tax pursuant to Section 9.02(a) other than the expenses of the contest. Any subsequent loss or disallowance of such refund (as a result of a redetermination of the claim giving rise to such refund by any taxing authority or as a result of a judicial proceeding with respect to such claim) or tax benefit shall be treated as a Tax subject to indemnification under Section 9.02(a) without regard to the exclusions in Section 9.02(a) and the provisions of this Section 9.02(b). If an Indemnitee receives an award of attorneys’ fees in a contest for which Borrower has paid an allocable portion of the contest expenses, such Indemnitee shall pay to Borrower that portion of the award that is directly related to the issues contested with respect to a refund Tax indemnified under this Section 9.02, taking into account the rules applicable to obtaining such an award and any decision of the court in making such award. Nothing in this Section 9.02 shall require any Indemnitee to contest or permit the contest of a claim which it would otherwise be required to contest pursuant to this Section 9.02 if such Indemnitee waives payment by Borrower of (x) any amount that might otherwise be payable by Borrower under this Section 9.02 by way of indemnity in respect of such Taxclaim, and (y) any other amount that might otherwise be payable by Borrower by way of indemnification in respect of any other claim for which a successful contest is adversely affected in any material respect because of such failure to contest. In such event, such Indemnitee shall reimburse Borrower for all amounts paid by or on behalf of Borrower with respect to such non-contested claim other than the expenses of the contest.
Appears in 2 contracts
Sources: Credit Agreement (Mesa Air Group Inc), Credit Agreement (Mesa Air Group Inc)
Contests. If Whenever any Governmental Authority asserts a written claim is made against claim, makes an Indemnitee assessment or otherwise disputes the amount of Taxes for which Sellers are or may be liable under this Agreement, Purchaser shall, if any proceeding is commenced against an Indemnitee (including a written notice informed of such proceeding) an assertion, inform the relevant Seller within ten business days, and the relevant Seller shall have the right to control any resulting proceedings and to determine whether and when to settle any such claim, assessment or dispute to the extent such proceedings or determinations affect the amount of Taxes for Taxes as to which Lessee could such Seller may be liable for payment under this Agreement, except that Purchaser shall have the right to consent, which consent will not be unreasonably withheld or indemnity hereunderdelayed, to any settlement to the extent such proceedings or if an Indemnitee makes a determination that a Tax is due settlement materially affect the amount of Taxes for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure Purchaser may be liable under this Agreement. If Purchaser fails to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless and such failure shall materially adversely affect prejudice a Seller's ability to defend such assessment, then the Seller's indemnification obligations shall be null and void with regard to such assessment. Whenever any Taxing Authority asserts a claim, makes an assessment or otherwise disputes the amount of Taxes for which Purchaser is liable under this Agreement Seller shall if informed of such an assertion, inform Purchaser within 10 business days, and, in any case, Purchaser shall have the right to contest control any resulting proceedings and to determine whether and when to settle any such claim) and , assessment or dispute, except that Sellers shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice have the right to contest consent, which consent shall not be unreasonably withheld or (II) the failure delayed, to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than any settlement to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, settlement affects the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit Taxes for which Lessee would have an indemnity obligation Sellers are or may be liable under this Section 6(b)(iv)) is at least $3,000Agreement. Notwithstanding If Seller fails to provide such notice and such failure materially prejudices Purchaser's ability to defend such assessment, then the foregoing, if any Indemnitee Purchasers indemnification obligation shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee null and void with respect regard to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxassessment.
Appears in 2 contracts
Sources: Acquisition Agreement, Acquisition Agreement (McLeodusa Inc)
Contests. If a written claim is made against (a) The Tax Indemnitee shall notify the Stockholders’ Representative in writing promptly, and in any event within thirty (30) days, of becoming aware of the commencement after the Closing Date of any Contest that could give rise to an indemnification payment under Section 7.1 (the specific issues that could give rise to such indemnification are referred to herein as “Tax Indemnifiable Matters”). Such notice shall contain factual information (to the extent known to the Tax Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceedingits Affiliates) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to Tax Indemnifiable Matters in reasonable detail and shall include copies of any notice or other document (to the extent such claim notice or document relates to Tax Indemnifiable Matters) received from any Governmental Authority in respect thereof.
(b) The Tax Indemnitee shall control all Contests, but to the extent that a Contest involves issues for which the Tax Indemnitee may be entitled to a payment under Section 7.1(a), the Stockholders’ Representative or its duly appointed representatives shall be allowed to attend all meetings between the Tax Indemnitee and the Governmental Authority in question and shall be provided with copies of all material correspondence and documents, to the extent relating to Tax Indemnifiable Matters. Neither the Tax Indemnitee nor any of its Affiliates may settle or compromise any asserted Tax liability in a Contest, to the extent relating to Tax Indemnifiable Matters, without the consent of Lessee the Stockholders’ Representative, which consent shall not be unreasonably withheld or delayed. For the avoidance of doubt, a Tax Indemnitee’s decision not to contest a Contest will be considered to be a settlement of that Contest for 30 days following purposes of the receipt preceding sentence. For purposes of such notice by Lessee; provided, however, thatthis Section 7.5(b), if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) Indemnitee and the act of paying the Tax would Stockholders’ Representative cannot prejudice the right come to contest agreement as to whether consent is being, or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In additionwill be, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing unreasonably withheld or delayed within 30 days after its receipt of such noticethe Stockholders’ Representative’s initial refusal to provide consent, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee disagreement shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated resolved by the Operative Documents without, Accounting Firm. The determination of the Accounting Firm shall be final and binding on both parties and may be entered and enforced in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(ivcourt having jurisdiction.
(c) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (Parent or to permit Lessee to pursue any contest) unless (A) Lessee one of its Affiliates, as the case may be, shall have agreed the right to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve prohibit the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting Stockholders’ Representative from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result participating in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect Contest as it relates to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any specific matter if Parent and Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (AIndemnitee(s) shall waive its right have waived their rights to indemnity under this Section 6(b), with respect to for such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxmatter.
Appears in 2 contracts
Sources: Merger Agreement (GXS Worldwide, Inc.), Merger Agreement (Open Text Corp)
Contests. If a taxing authority makes a written claim is made against an Indemnitee or if for any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as Tax with respect to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation required to indemnify hereunder, such Indemnitee shall promptly give Lessee written notice in writing of such claim (provided, however, that the claim. An Indemnitee's failure to provide such notice to Lessee shall not affect diminish Lessee's obligations or such Indemnitee's rights hereunder except to the Owner Participant unless extent that such failure shall materially adversely affect the right precludes Lessee's and such Indemnitee's ability to contest such claim) and shall not take Tax. If Lessee promptly (and, in any action with respect to such claim or Tax without the consent event, within 15 days of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such from the Indemnitee) requests the Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay so, the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)Lessee's expense, in good faith contest (or, at the Indemnitee's option, require Lessee to contest in Lessee's name, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of any such Taxes Tax. The Indemnitee shall determine in its sole discretion the forum in which the contest of such Tax shall be pursued and whether such contest shall be by (Xi) resisting payment thereof, if lawful and practicable, (Yii) not paying the same except under protest protest, if protest is necessary or advisable and proper proper, or (Ziii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings. If requested the Indemnitee determines that such contest shall be by the manner described in either of clauses (ii) or (iii) above, Lessee shall advance sufficient funds on an after-tax, interest-free basis to do so by Lesseethe Indemnitee to make the payment required. If an Indemnitee contests the validity, applicability or amount of any Tax hereunder, Lessee shall have the right to participate in such contest at its own expense, including the right to attend governmental or judicial conferences concerning such claim for Tax and the right to review and advise the Indemnitee as to all material written submissions to any governmental or other authority relating to the Tax for which indemnification is sought. Notwithstanding the foregoing, the Indemnitee shall appeal only be required to contest (and Lessee shall only be permitted to contest) any adverse administrative or judicial decisionTax if (A) independent tax counsel selected by the Indemnitee is of the opinion that there is a reasonable basis for contesting the matter in question; (B) Lessee has acknowledged in writing its liability to indemnify the Indemnitee with respect to the Tax in question; (C) Lessee shall pay (and shall acknowledge in writing Lessee's liability to pay) the Indemnitee on demand for all reasonable costs and expenses incurred by such Indemnitee in connection with contesting such claim (including, except without limitation, all costs, expenses, losses, reasonable legal and accounting fees (including fees associated with the Indemnitee's consultation with independent tax counsel as described herein), disbursements, penalties, interest and additions to tax); (D) the issue shall not be the same as an issue previously contested hereunder and decided adversely unless independent tax counsel selected by the Indemnitee is of the opinion that the applicable law has changed, and (E) the amount of Tax at issue exceeds $25,000. The Indemnitee shall not be required to pursue appeal any appeals judicial decision unless it receives an opinion of independent counsel selected by such Indemnitee to the effect that it is more likely than not that such appeal would be successful. Under no circumstances shall the Indemnitee be required to appeal a decision to or request a hearing by the United States Supreme Court. If and Nothing in this Section 12.5 shall require any Indemnitee to contest, or permit Lessee to contest, a claim with respect to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment imposition of such Indemnitee, adversely affecting such Indemnitee, any Tax if such Indemnitee shall permit Lessee waive its right to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this indemnification under Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee 12.3 with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 2 contracts
Sources: Aircraft Lease Agreement (Republic Airways Holdings Inc), Aircraft Lease Agreement (Republic Airways Holdings Inc)
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such against a Tax Indemnitee for any Taxes with respect to which the Lessee may be required to indemnify hereunderagainst hereunder (a "Tax Claim"), such Tax Indemnitee shall give the Lessee written notice of such Tax Claim promptly (but in any event within twenty (20) days) after its receipt, and shall furnish Lessee with copies of such Tax Claim and all other writings received from the taxing authority to the extent relating to such claim (but failure to so notify the Lessee shall relieve the Lessee of its obligations hereunder only to the extent it effectively precludes a contest of the claim). The Tax Indemnitee shall not pay such Tax Claim until at least thirty (30) days after providing the Lessee with such written notice, unless (a) the Tax Indemnitee is required to do so by law or regulation and (b) in the written notice described above, the Tax Indemnitee has notified the Lessee of such requirement. If requested by the Lessee in writing shall so request within 30 days after its receipt of such notice, then such Tax Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), shall in good faith at Lessee's expense contest (orsuch Tax; provided, if permitted by applicable lawhowever, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue contest involves only Taxes constituting property taxes, sales taxes, or issues from use taxes and does not involve any taxes or other issues arising in the same administrative or judicial proceeding that relating to a Tax Indemnitee which are unrelated to the transactions contemplated by the Operative Documents withoutAgreements and if no Equity Insufficiency Circumstance exists, such contest shall be undertaken by the Lessee at the Lessee's expense and at no-after-tax cost to the Lessor or the Owner Participant, but if such contest would involve any other type of Tax or any taxes or issues relating to a Tax Indemnitee which are unrelated to the transactions contemplated by Operative Agreements or if an Equity Insufficiency exists, then such Tax Indemnitee may, in its sole discretion, control such contest (including selecting the forum for such contest, and determining whether any such contest shall be conducted by (i) paying such Tax under protest or (ii) resisting payment of such Tax or (iii) paying such Tax and seeking a refund thereof; provided, further, however, that at such Tax Indemnitee's option, such contest shall be conducted by the Lessee in the name of such Tax Indemnitee). In no event shall such Tax Indemnitee be required or the Lessee be permitted to contest any Tax for which the Lessee is obligated to indemnify pursuant to this Section unless: (i) the Lessee shall have acknowledged in writing its liability to such Tax Indemnitee for an indemnity payment pursuant to this Section as a result of such claim if and to the extent such Tax Indemnitee or the Lessee, as the case may be, shall not prevail in the contest of such claim; provided, however, that the Lessee shall not be required to indemnify for such Taxes to the extent the results of the contest clearly and unambiguously demonstrate that the Tax is not an indemnified Tax; (ii) such Tax Indemnitee shall have received the opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Lessee furnished at the Lessee's sole expense, to the effect that a reasonable basis exists for contesting such claim or, in the good faith judgment event of such Indemniteean appeal of a court decision, adversely affecting such Indemniteethat it is more likely than not that an appellate court or an administrative agency with appellate jurisdiction, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In as the case of a contest controlled by an Indemniteemay be, such Indemnitee shall consult with Lessee in good faith regarding will reverse or substantially modify the manner of contesting such claim and shall keep Lessee reasonably informed regarding adverse determination; (iii) the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable out-of-pocket costs (and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with at no additional net after-tax cost to such Indemnitee Participation Agreement (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such paymentTRLI 2001-1C), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 2 contracts
Sources: Participation Agreement (Trinity Industries Inc), Participation Agreement (Trinity Industries Inc)
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such against a Tax Indemnitee for any Taxes with respect to which the Lessee may be required to indemnify hereunder. If requested by against hereunder or if a Tax Indemnitee shall determine that any tax to which the Lessee may have an indemnity obligation hereunder may be payable (a "Tax Claim"), then such Tax Indemnitee shall give the Lessee written notice of such Tax Claim promptly (but in writing any event within 30 twenty (20) days after its receipt of the written Tax Claim or its determination, as applicable), and shall furnish Lessee with copies of such Tax Claim and all other writings received from the taxing authority to the extent relating to such claim (but failure to so notify the Lessee shall not relieve the Lessee of its obligations hereunder except to the extent that it effectively precludes the ability of the Lessee to conduct a contest of the Tax Claim). The Tax Indemnitee shall not pay such Tax Claim until at least thirty (30) days after providing the Lessee with such written notice, such unless (a) the Tax Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested required to do so by Lesseelaw or regulation or the failure to pay such Tax Claim could result in a material adverse financial, legal or other consequence to the Tax Indemnitee and (b) in the written notice described above, the Tax Indemnitee has notified the Lessee of such requirement or such material adverse consequence (such notice however shall not require the disclosure of the Tax Indemnitee's confidential information, as determined in the sole discretion of such Tax Indemnitee, or the Tax Indemnitee's tax returns, books, or records). If the Lessee shall so request within 30 days after receipt of such notice (or such shorter period as is reasonably specified by the Tax Indemnitee if any contest of the Tax must be commenced prior to the expiration of 30 days), then such Tax Indemnitee shall appeal any adverse administrative in good faith at Lessee's sole expense contest such Tax or judicial decisionpermit the Lessee to contest such Tax, except that the as such Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and elect; provided, however, that to the extent (i) the contest involves only Taxes constituting property taxes, sales taxes, or use taxes, (ii) the contest does not involve any taxes that the Lessee is not required to indemnify the Tax Indemnitee is able to separate the contested issue or issues from taxes and other issues arising in the same administrative or judicial proceeding relating to a Tax Indemnitee that are unrelated to the transactions contemplated by the Operative Documents withoutAgreements, (iii) the contest can be pursued in the name of the Lessee and independently from any other proceeding involving a Tax Claim of a Tax Indemnitee for which Lessee has not agreed in writing to indemnify such Tax Indemnitee, and (iv) no Equity Insufficiency Circumstance exists, such contest shall be undertaken by the Lessee at the Lessee's sole expense and the after-tax costs of the Lessor, the Owner Participant, or other Tax Indemnitee shall be reimbursed by the Lessee. Notwithstanding the preceding sentence, if (a) such contest would involve any other type of Tax, any taxes that the Lessee is not required to indemnify the Tax Indemnitee or taxes and other issues relating to a Tax Indemnitee which are unrelated to the transactions contemplated by the Operative Agreements, (b) the Tax Indemnitee determines that such contest conducted by the Lessee could have a material adverse impact on such Tax Indemnitee's business or operations or involve risk of the imposition of criminal liability on a Tax Indemnitee, or (c) an Equity Insufficiency Circumstance exists, then such Tax Indemnitee may, in its sole discretion, control such contest (including selecting the forum for such contest, and determining whether any such contest shall be conducted by (i) paying such Tax under protest or (ii) resisting payment of such Tax or (iii) paying such Tax and seeking a refund thereof; provided, however, that at such Tax Indemnitee's option, such contest shall be conducted by the Lessee in the name of such Tax Indemnitee). In no event shall such Tax Indemnitee be required or the Lessee be permitted to contest any Tax for which the Lessee is obligated to indemnify pursuant to this Section 7.1 unless: (i) the Lessee shall have acknowledged in writing (x) that it is solely responsible for any Indemnified Tax resulting from any contest under its control, (y) its liability to such Tax Indemnitee for all reasonable out of pocket costs, losses and expenses that the Tax Indemnitees may incur in connection with contesting the Indemnified Tax (including, but not limited to, any reasonable legal, accounting and investigatory fees and disbursements), and (z) its liability for an indemnity payment pursuant to this Section 7.1 as a result of such claim if and to the extent such Tax Indemnitee or the Lessee, as the case may be, shall not prevail in the contest of such claim; provided, however, that the Lessee shall not be required to indemnify for such Taxes to the extent the results of the contest clearly demonstrate that the Tax is not an Indemnified Tax unless the Lessee's conduct of the contest materially prejudiced the Tax Indemnitee; (ii) such Tax Indemnitee shall have received the opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Lessee and furnished at the Lessee's sole expense, opining that a reasonable basis exists for contesting such claim or, in the good faith judgment event of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination court or administrative agency decision, that as a result of a change in law or fact it is more likely than not that an appellate court or an administrative agency or decision making body with respect to any claimappellate jurisdiction, as the case may be, will reverse or substantially modify the adverse determination; (iii) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Tax Indemnitee on demand (and at no after tax costs to the Lessor, the Owner Participant and any Tax Indemnitee) all reasonable out-of-pocket costs and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimclaim (including, without limitation, all reasonable legal and accounting fees and disbursements); (Biv) no Lease Default described in Section 14(a), 14(b), 14(c), 14(g) or 14(h) of the Lease or a Lease Event of Default shall have occurred and shall have been continuing, unless the Tax Indemnitee in its sole discretion exercised in good faith allows the Lessee to post a satisfactory bond or other security that does not involve a possibility of a Lien on the Equipment or any portion thereof or on any interest therein, and which bond or other security will be for an amount equal to the sum of (I) the costs of such contest (as reasonably estimated by such Tax Indemnitee in good faith) and the Taxes which may be required to be indemnified and (II) if such contest shall involve Lease Default or Lease Event of Default involves a payment obligation under an Operative Agreement that is currently not paid in full, the payment unpaid amount of such obligation, plus the present value of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost amounts not yet due pursuant to such Indemnitee obligation; (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (Cv) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeituresale, sale forfeiture or loss of, or the creation of any Lien, or the Aircraft (unless Lessee shall have or otherwise made provisions a provision to protect the interests interest of any such IndemniteeTax Indemnitee (in a manner satisfactory to such Tax Indemnitee in its sole discretion), on the Equipment or any portion thereof or any interest therein; (Dvi) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of such claims alone, or, if the subject matter thereof shall be of a continuing or recurring nature, when aggregated with substantially identical potential claims with respect to the transactions contemplated by the Operative Agreements shall be at least $25,000; (vii) if such contest shall be conducted in a manner requiring the payment or deposit of the claim, the Lessee shall have paid the amount required (and at no after-tax costs to the Lessor, the Owner Participant or other Tax Indemnitee); and (viii) there is no risk of imposition of criminal liability or penalties. The Lessee shall cooperate with the Tax being contested, plus any interest and penalties and an amount estimated Indemnitee in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (any contest controlled and all directly related claims conducted by the Tax Indemnitee and claims based on the outcome Tax Indemnitee in good faith shall consult with the Lessee regarding the conduct of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such contest. A Tax Indemnitee shall repay not be required to Lessee any amount previously paid pursue an appeal to the U.S. Supreme Court or advanced to such the highest court in Canada or Mexico. The Tax Indemnitee shall cooperate with respect to any contest controlled and conducted by the Lessee and the Lessee shall consult with the Tax Indemnitee regarding the conduct of such claimcontest. Notwithstanding anything to the contrary contained in this Section 7.1, plus interest no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing or recurring nature and shall have previously been adversely decided to the Tax Indemnitee pursuant to the contest provisions of this Section 7.1 unless there shall have been a change in the law (including, without limitation, amendments to statutes or regulations, administrative rulings (excluding private letter rulings and other rulings or materials that may not be relied upon by such Tax Indemnitee as precedent) or court decisions in the applicable jurisdiction) enacted, promulgated or effective after such claim shall have been so previously decided, and such Tax Indemnitee shall have received an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Lessee, furnished at the rate Lessee's sole expense, to the effect that would have been payable by such change is favorable to the relevant taxing authority with respect to position which such Tax Indemnitee or the Lessee, as the case may be, had asserted in such previous contest and as a refund result of such Taxchange, it is more likely than not that the Tax Indemnitee will prevail or, in the event of an appeal of an adverse court or administrative agency decision, that it is more likely than not that an appellate court or an administrative agency tribunal or decision making body with appellate jurisdiction, as the case may be, will reverse or substantially modify the adverse determination. Notwithstanding anything contained in this Section 6(b)7.1, an a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without the Lessee's consent if such Tax Indemnitee (A) shall waive its right to indemnity under this Section 6(b), 7.1 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to the Lessee any amount previously paid or advanced by the Lessee pursuant to this Section 6(b) 7.1 with respect to such TaxTax Claim, plus interest at less any reasonable costs and expenses of the rate that would have been payable by the relevant taxing authority with Tax Indemnitee prior to such payment in respect to a refund of such TaxTax Claim.
Appears in 2 contracts
Sources: Participation Agreement (Trinity Industries Inc), Participation Agreement (Trinity Industries Inc)
Contests. If a written any claim is shall be made against an Indemnitee GE Capital or if any proceeding is shall be commenced against an Indemnitee GE Capital (including a by written notice of such proceeding) for any Collateral Taxes as which Aladdin Gaming is obligated to which Lessee could be liable for payment or indemnity hereunderpay pursuant to this Section 4, or if an Indemnitee makes a determination GE Capital shall reasonably determine that a Tax is due for any Collateral Taxes which Lessee could Aladdin Gaming may have an indemnity obligation hereunderto pay under this Section 4 may be payable, such Indemnitee GE Capital shall promptly give Lessee notice (and in any event within 30 days) notify Aladdin Gaming in writing (provided that failure to so notify shall not alter GE Capital's rights under Section 4 except to the extent (and then only to the extent that) such failure precludes or materially adversely affects the ability to conduct a contest of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claimCollateral Taxes) and shall not take any action with respect to such claim or Tax without the written consent of Lessee Aladdin Gaming (and such consent shall not be unreasonably withheld or unreasonably delayed) for 30 days following the after receipt of such notice by LesseeAladdin Gaming; provided, however, thatthat in the case of any such claim or proceeding, if such Indemnitee GE Capital shall be required by law or regulation to take action prior to the end of such 30-30 day period, such Indemnitee shall, GE Capital shall in such notice to LesseeAladdin Gaming, so inform LesseeAladdin Gaming, and GE Capital shall not take any action with respect to such Indemnitee claim, proceeding or Collateral Taxes without the consent of Aladdin Gaming (such consent shall take no action not be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an Indemnitee 10 days after the receipt of such notice by Aladdin Gaming unless GE Capital shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-10 day period. Provided that no Event of Default has occurred and is continuing, Aladdin Gaming shall be entitled for a period if of 30 days from receipt of such notice from GE Capital (A)(Ior such shorter period as GE Capital has notified Aladdin Gaming is required by law or regulation for GE Capital to commence such contest), to request in writing that GE Capital contest the imposition of such Collateral Tax, at Aladdin Gaming's expense. In its sole discretion, GE Capital shall either (i) control the failure contest, acting through counsel reasonably acceptable to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest Aladdin Gaming, or (IIii) take all reasonable steps to enable Aladdin Gaming to control the failure contest. The party controlling the contest shall consult in good faith with the other party and its counsel with respect to so pay would result the contest of such claim for Collateral Taxes (or claim for refund) but the decision regarding what actions to be taken shall be made by the controlling party in criminal penalties its sole judgment; provided, however, that if GE Capital is the controlling party and (B) such Indemnitee shall act in connection with paying Aladdin Gaming recommends the Tax acceptance of a settlement offer made by the relevant taxing authority and GE Capital rejects the settlement offer, then the portion of the Collateral Taxes at issue in the manner that is claim which are payable by Aladdin Gaming shall not exceed the least prejudicial to amount which would have been owed if the pursuit of the contest)settlement offer would have been accepted. In addition, such Indemnitee the controlling party shall (provided that Lessee shall have agreed to keep such information confidential other than the noncontrolling party reasonably informed as to the extent necessary in order to progress of the contest and shall provide the claimnoncontrolling party with a copy of (or appropriate excepts from) furnish Lessee with copies of any requests for information from any reports or claims issued by the relevant taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)controlling party thereof, in good faith connection with such claim or contest (orthereof. Notwithstanding anything contained herein to the contrary, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee GE Capital shall not be required to pursue any appeals to the United States Supreme Court. If contest (and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee Aladdin Gaming shall not fail be permitted to take any action expressly required by this Section 6(b)(ivcontest) (including, without limitation, any action regarding any appeal of an adverse determination a claim with respect to any claim) or settle or compromise the imposition of Collateral Taxes if GE Capital waives its right to payment from Aladdin Gaming for such Collateral Taxes (and any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on year or any other taxable year the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 2 contracts
Sources: Facilities Agreement (Aladdin Capital Corp), Facilities Agreement (Aladdin Gaming Enterprises Inc)
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a Parent shall give prompt written notice to Holdings and Member Representative (and in all events, within twenty (20) days of such proceedingthe receipt thereof) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such any written notice by Lessee; providedthe Surviving Companies, however, that, if such Indemnitee shall be required by law to take action prior to the end Parent or any of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) Parent’s Affiliates (including, without limitation, the other Holdings Entities), which involves the assertion of any action regarding claim, or the commencement of any appeal Action relating to Taxes in respect of which an adverse determination indemnification claim may be made by any Parent Indemnitee pursuant to this Agreement (a “Tax Claim”); provided, that failure to comply with such notice provision shall not affect Parent’s right to indemnification hereunder, except to the extent that Holdings and the Parent Share Recipients are materially prejudiced thereby. Holdings or Member Representative shall control the contest or resolution of any Tax Claim relating to any income Tax Returns of any Holdings Entity for periods that end on or before the Closing Date (other than a Tax Claim relating to 280E and which also relates to one or more income Tax Return(s) of Parent or one or more of Parent’s Affiliates, a “Combined Tax Claim”); provided, however, that (i) Member Representative or Holdings, as applicable, shall provide Parent copies of all written correspondence related to such Tax Claim and otherwise keep Parent apprised of all material developments with respect to any claimTax Claim, (ii) Holdings or settle or compromise any claim without Member Representative shall obtain the prior written consent of Lessee Parent (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoingwhich consent shall not be unreasonably withheld, in no event shall an Indemnitee be required conditioned or delayed) before entering into any settlement of a claim or ceasing to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting defend such claim, and (Biii) if Parent shall be entitled to participate in the defense of such claim and to employ counsel of its choice for such purpose, the fees and expenses of which separate counsel shall be borne solely by Parent. Parent shall control the contest or resolution of any other Tax Claim including, without limitation, a Combined Tax Claim; provided, however, that (i) Parent shall involve the payment provide Member Representative copies of the claim, Lessee shall advance the amount thereof plus (all written correspondence related to the extent indemnified hereunder) interest, penalties such Tax Claim and additions to tax otherwise keep Member Representative apprised of all material developments with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment)Tax Claim, (Cii) Parent shall obtain the prior written consent of Member Representative (which consent shall not be unreasonably withheld, conditioned or delayed) before entering into any settlement of a claim or ceasing to defend such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expensesclaim, and (Eiii) Holdings or Member Representative shall be entitled to participate in the case defense of a contest that is being pursued by an Indemniteesuch claim and to employ counsel of its choice for such purpose, the aggregate amount fees and expenses of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and separate counsel shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced borne solely by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxHoldings.
Appears in 2 contracts
Sources: Merger Agreement (Vireo Growth Inc.), Merger Agreement (Vireo Growth Inc.)
Contests. If For purposes of this Agreement, a “Contest” is any audit, court proceeding or other dispute with respect to any Tax matter that affects the Company or its Subsidiaries. Unless the Buyer has previously received written notice from the Equityholder Representative of the existence of such Contest, the Buyer shall give written notice to the Equityholder Representative of the existence of any Contest relating to a Tax matter which could result in an indemnity claim is made against an Indemnitee or if by any proceeding is commenced against an Indemnitee (including a Buyer Indemnified Person pursuant to Article VIII, within ten days from the receipt by the Buyer of any written notice of such proceedingContest, but no failure to give such notice shall relieve the Sellers of any liability hereunder unless the Sellers are materially prejudiced thereby. The Buyer, on the one hand, and the Equityholder Representative, on the other, agree, in each case at no cost to the other party, to cooperate with the other and the other’s Representatives in a prompt and timely manner in connection with any Contest. Such cooperation shall include, but not be limited to, making available to the other party, during normal business hours, all books, records, returns, documents, files, other information (including, without limitation, working papers and schedules), officers or employees (without substantial interruption of employment) for Taxes as or other relevant information necessary or useful in connection with any Contest requiring any such books, records and files. If a Contest relates to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee matter that could have result in an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice claim by any Buyer Indemnified Person pursuant to Article VIII and the then remaining amount in writing the Indemnity Escrow Fund is equal to at least half of the amount of Taxes that would reasonably be expected to be payable as a result of such claim Contest (such Contest, a “Seller Tax Contest”), the Equityholder Representative shall, at its election, have the right to represent the Company’s or applicable Subsidiary’s interests in any such Seller Tax Contest, to employ counsel of its choice at its expense (on behalf of the Sellers) and to control the conduct of such Seller Tax Contest, including settlement or other disposition thereof; provided, however, that the failure to provide such notice Buyer shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect have the right to contest consult with the Equityholder Representative regarding any such claim) and shall not take Seller Tax Contest at the Buyer’s own expense; provided further, that any action settlement or other disposition of any such Seller Tax Contest may only be with respect to such claim or Tax without the prior written consent of Lessee for 30 days following the receipt of such notice Buyer, which consent will not be unreasonably withheld or delayed. Buyer shall have the right to control any Seller Tax Contest that the Equityholder Representative does not elect to control, and any other Contest that could result in an indemnity claim by Lesseeany Buyer Indemnified Person pursuant to Article VIII; provided, however, that, if such Indemnitee that the Equityholder Representative shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice have the right to contest or consult with the Buyer regarding any such Contest at the Equityholder Representative’s own expense (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit on behalf of the contestSellers); provided further, that any settlement or other disposition of any such Contest may only be with the prior written consent of the Equityholder Representative, which consent will not be unreasonably withheld or delayed. In additionExcept as otherwise explicitly set forth in this Section 4.8(b), such Indemnitee shall (provided that Lessee the Buyer shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee sole right to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination Contest with respect to any claim) or settle or compromise any claim without period ending after the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxClosing Date.
Appears in 2 contracts
Sources: Merger Agreement (Zayo Group LLC), Merger Agreement (Zayo Group LLC)
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs costs, in-house attorney fees and reasonable outside attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest, but not if such contest involves issues unrelated to the transactions contemplated by the Operative Documents that cannot be severed from issues related to such indemnifiable Taxes by good faith diligent efforts) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by LesseeLessee in writing, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs costs, in- house attorney fees and reasonable outside attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,00050,000 and (F) if requested prior to or during the contest by the Indemnitee, independent tax counsel selected by Lessee and reasonably acceptable to the Indemnitee, renders to the Indemnitee a written opinion that there is a reasonable basis (under the standard set forth in ABA Formal Opinion 85-352 or any successor thereto) for contesting such claim. Notwithstanding the foregoing, (X) Lessee shall not be permitted to contest in the name of the Indemnitee if such contest involves Taxes based on or measured by the gross or net income of the Indemnitee and, provided, that if the Indemnitee determines in good faith that it is reasonably likely that such contest may have a material adverse impact on the Indemnitee, such Indemnitee may retain or reassert control of any contest Lessee would otherwise be permitted to contest, and (Y) if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on any claim the outcome contest of such claimwhich is materially prejudiced as a result of the release, waiver, compromise or settlement) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 2 contracts
Sources: Participation Agreement (Us Airways Inc), Participation Agreement (Us Airways Inc)
Contests. (a) If any Taxing Authority asserts a written claim is made against an Indemnitee or if Tax Claim in respect of any proceeding is commenced against an Indemnitee (including a written QNX Entity, then the party hereto first receiving notice of such proceedingTax Claim promptly shall provide written notice thereof to the other party or parties hereto. Such notice shall specify in reasonable detail the basis for such Tax Claim and shall include a copy of the relevant portion of any correspondence received from the Taxing Authority.
(b) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that In the case of a Tax is due for which Lessee could Proceeding involving a QNX Entity in respect of any taxable period that ends on or before the Closing Date Parent shall have an indemnity obligation hereunderthe right to control, at its own expense, such Indemnitee shall promptly give Lessee notice in writing of such claim (Tax Proceeding; provided, however, that with respect to any Tax Proceeding in respect solely of a QNX Entity, which Tax Proceeding would reasonably be expected to have an adverse effect on the failure Buyers or any of their Affiliates (including the relevant QNX Entity) (i) Parent shall consult with Buyers before taking any significant action in connection with such Tax Proceeding, (ii) the Buyers shall be entitled to provide participate in such notice Tax Proceeding at Buyer’s expense (along with counsel and other advisors of their choice) and (iii) Parent shall not affect Lessee's obligations hereunder settle, compromise or abandon any such Tax Proceeding without obtaining the prior written consent of the Buyers (which consent shall not be unreasonably withheld or delayed), to the Owner Participant unless extent such failure settlement or compromise would reasonably be expected to result in an adverse effect on the Buyers that is material, provided that if such consent is withheld by Buyers, control of such Tax Proceeding shall materially adversely affect be assumed by Buyers at their own expense and Parent’s liability for any Taxes (including Parent Taxes) resulting from such Tax Proceeding shall not exceed the amount that would have been due under such settlement or compromise (Parent’s liability for Taxes in excess of the amount that would so have been due, “Excess Taxes”) (and, notwithstanding any other provision, Buyer shall indemnify Parent against any such Excess Taxes, to the extent any such Taxes are due or payable to any Tax Authority by Parent or any of its subsidiaries or Affiliates (other than any QNX Entity)).
(c) In the case of a Tax Proceeding for a Straddle Period of a QNX Entity, the Buyers shall have the right to contest control, at their own expense, such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by LesseeProceeding; provided, however, thatthat (i) the Buyers shall consult with Parent before taking any significant action in connection with such Tax Proceeding, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee ii) Parent shall be entitled to pay participate in such Tax Proceeding (along with counsel and other advisors of its choice), (iii) Buyers shall take all actions in connection with such Tax Proceeding that relate to a Pre-Closing Period no differently than any action in connection with such Tax Proceeding that relates to a Post-Closing Period, and in all cases shall treat any such Tax Proceeding as if any and all liability for Taxes resulting therefrom were the responsibility of Buyers and (iv) the Buyers shall not settle, compromise or abandon any such Tax claimed and ▇▇▇ for a refund Proceeding without obtaining the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed, to the end of extent that such 30-day period if (A)(I) the failure to so pay the Tax settlement or compromise would result in substantial penalties an indemnification payment by Parent for any Parent Taxes or otherwise reasonably be expected to result in an adverse effect on Parent, provided that if such consent is withheld by Parent and Buyers have complied with all their covenants hereunder in relation to such Tax Proceeding, then, notwithstanding any other provision of this Agreement, Parent’s liability for Taxes pursuant to Section 6.2(a) shall include and Parent shall indemnify the Buyers and each of their subsidiaries and Affiliates (unless immediately reimbursed by Lesseeincluding the QNX Entities) and hold them harmless from and against the act amount of paying the Taxes resulting from such Tax would not prejudice the right to contest or (II) the failure to so pay would result Proceeding that are in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit excess of the contest). In addition, amount that would have been due under such Indemnitee shall settlement or compromise.
(provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimd) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an IndemniteeTax Proceeding involving a QNX Entity (other than any Tax Proceeding described in Sections 6.5(b) or 6.5(c)) Buyers shall have the right to control, at their own expense, such Indemnitee Tax Proceeding, Parent shall not have any right to participate in any such Tax Proceeding and Section 6.5(a) shall not apply to such a Tax Claim; provided, however, that if such Tax Proceeding would reasonably be expected to have an adverse effect on Parent or any of its Affiliates, and only at such time when it becomes readily apparent that such Tax Proceedings would be expected to have such an effect (the “Contest Relevant Time”), (i) the Buyer shall consult with Lessee Parent before taking any significant action in good faith regarding connection with such Tax Proceeding, (ii) Parent shall be entitled to participate in such Tax Proceeding (along with counsel and other advisors of its choice), and (iii) from and after the manner of contesting such claim and shall keep Lessee reasonably informed regarding Contest Relevant Time, the progress of such contest. An Indemnitee Buyers shall not fail to take settle, compromise or abandon any action expressly required by this Section 6(b)(iv) (including, such Tax Proceeding without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without obtaining the prior written consent of Lessee Parent (except as contemplated by this Section 6(b)(ivwhich consent shall not be unreasonably withheld, conditioned or delayed)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunderthat such settlement or compromise would result in an indemnification payment by Parent for any Parent Taxes or otherwise reasonably be expected to result in an adverse effect on Parent that is material.
(e) interestNotwithstanding any other provision, penalties Parent shall have the exclusive right to control in all respects, including as to settlement, any Tax Proceeding relating to any Combined Tax Return, the Buyers shall not have any right to participate in any such Tax Proceeding and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost Section 6.5(a) shall not apply to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the a Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxClaim.
Appears in 2 contracts
Sources: Share Purchase Agreement, Share Purchase Agreement (Harman International Industries Inc /De/)
Contests. If (a) In the event any Governmental Authority informs the Purchaser or the Seller (or any of their respective Affiliates) of any proposed or actual audit, examination, adjustment, claim, assessment, or demand with respect to Taxes of the Company or any Subsidiary for any taxable period that ends on or before the Closing Date or any Straddle Period, the party so informed shall promptly notify the other of such matter. No failure or delay in informing the other party shall reduce or otherwise affect the obligations or liabilities of any party hereto, except to the extent such failure or delay shall have materially and adversely affected the recipient party’s ability to defend against any Liability or claim with respect to such Taxes. Any notice shall be accompanied by a written claim is made against an Indemnitee or if copy of any proceeding is commenced against an Indemnitee (including a written notice or other document received from the applicable Governmental Authority with respect to such matter.
(b) In the case of a Tax audit or administrative or judicial proceeding (a “Contest”) that relates to taxable periods ending on or before the Closing Date, the Seller shall have the sole right, at its expense, to control the conduct of such proceedingContest, provided that Seller conducts such Contest diligently and in good faith. If the Seller elects to control any Contest that relates to taxable periods ending on or before the Closing Date, the Purchaser, the Company and any relevant Subsidiary shall have the right, at their expense, to participate in such Contest.
(c) for Taxes as In the case of a Contest that relates to any Straddle Period, the Purchaser or the relevant Subsidiary shall have the sole right, at its expense, to control the conduct of such Contest. The Seller shall have the right, at its expense, to participate in such Contest involving any asserted Tax Liability with respect to which Lessee could indemnity may be liable for payment sought from the Seller pursuant to Section 6.01.
(d) Neither the Seller nor the Purchaser (nor any of their respective Affiliates) may settle or indemnity hereundercompromise any asserted Liability under this Section 6.03 without the prior written consent of the other; provided, however, that consent to settlement or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereundercompromise shall not be unreasonably withheld or delayed. The Purchaser and the Seller agree to cooperate, such Indemnitee shall promptly give Lessee notice and the Purchaser agrees to cause the Company and the Subsidiaries to cooperate, in writing the defense against or compromise of such any claim (in any Contest; provided, however, that the failure to provide such notice Seller shall not affect Lessee's obligations hereunder to bear the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) cost and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt expense of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxcooperation.
Appears in 2 contracts
Sources: Restructuring and Investment Agreement (Stock Building Supply Holdings, Inc.), Restructuring and Investment Agreement (Stock Building Supply Holdings, Inc.)
Contests. If a written claim is made by any taxing authority against an Indemnitee or if Lessor for any proceeding Tax with respect to which Lessee is commenced against an Indemnitee (including a required to indemnify Lessor hereunder, Lessor shall promptly give Lessee written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the claim. Lessor's failure to provide such notice to Lessee shall not affect diminish Lessee's obligations or Lessor's rights hereunder except to the Owner Participant unless extent that such failure shall materially adversely affect the right precludes Lessee's and Lessor's ability to contest such tax claim) and shall not take . If Lessee promptly (and, in any action with respect to such claim or Tax without the consent event, within 15 days of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able from Lessor) requests Lessor to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In additionso, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee Lessor shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)Lessee's expense, in good faith contest (or, at Lessor's option, require Lessee to contest in Lessee's name, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of any such Taxes Tax. Lessor shall determine in its sole discretion the forum in which the contest of such Tax shall be pursued and whether such contest shall be by (Xi) resisting payment thereof, if lawful and practicable, (Yii) not paying the same except under protest protest, if protest is necessary or advisable and proper proper, or (Ziii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings. If requested Lessor determines that such contest shall be by the manner described in either of clauses (ii) or (iii) above, Lessee shall advance sufficient funds on an after-tax, interest-free basis to do so by LesseeLessor to make the payment required. If Lessor contests the validity, applicability or amount of any Tax hereunder, Lessee shall have the Indemnitee right to review and advise Lessor as to all material written submissions to any governmental or other authority relating to the Tax for which indemnification is sought. Lessor shall appeal consult in good faith with Lessee and its counsel regarding all other material aspects of any adverse administrative such contest. Lessee shall have the right to attend governmental or judicial decisionconferences concerning any such tax claim only if such Tax is the only matter that affects Lessor which is pending before the governmental or judicial body. Notwithstanding the foregoing, except Lessor shall only be required to contest (and Lessee shall only be permitted to contest) any Tax if (A) independent tax counsel selected and compensated by Lessee is of the opinion that there is a reasonable basis for contesting the matter in question; (B) Lessee has acknowledged in writing its liability to indemnify Lessor with respect to the Tax in question; (C) Lessee shall pay (and shall acknowledge in writing Lessee's liability to pay) Lessor on demand for all reasonable costs and expenses incurred by Lessor in connection with contesting such claim (including, without limitation, all costs, expenses, losses, reasonable legal and accounting fees (including fees associated with Lessor's consultation with independent tax counsel as described herein), disbursements, penalties, interest and additions to tax); (D) the issue shall not be the same as an issue previously contested hereunder and decided adversely unless independent tax counsel selected and compensated by Lessee is of the opinion that the Indemnitee applicable law has changed, (E) the amount of Tax at issue exceeds $10,000, and (F) if an Event of Default has occurred and is continuing under this Agreement, Lessee has posted a bond or other security in form and substance satisfactory to Lessor in its sole and absolute discretion. Lessor shall not be required to pursue appeal any appeals judicial decision unless it receives an opinion of independent counsel selected and compensated by Lessee to the effect that it is more likely than not that such appeal would be successful. Under no circumstances shall Lessor be required to appeal a decision to or request a hearing by the United States Supreme Court. If and Nothing in this Section 8.5 shall require Lessor to the extent the Indemnitee is able to separate the contested issue contest, or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of , a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests imposition of any such Indemnitee), (D) no Lease Event of Default Tax if Lessor shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for waive its obligations hereunder by advancing right to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation indemnification under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee 8.1 hereof with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 2 contracts
Sources: Aircraft Lease Agreement (Republic Airways Holdings Inc), Aircraft Lease Agreement (Republic Airways Holdings Inc)
Contests. If a written claim is made by any taxing authority against an Indemnitee or if for any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as Tax with respect to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation required to indemnify hereunder, such Indemnitee shall promptly give Lessee written notice in writing of such claim (provided, however, that the claim. An Indemnitee's failure to 42 provide such notice to Lessee (for reasons other than Lessee's failure to fulfill its obligations to Indemnitee under this Lease) shall not affect diminish Lessee's obligations or such Indemnitee's rights hereunder except to the Owner Participant unless extent that such failure shall materially adversely affect the right precludes Lessee's and such Indemnitee's ability to contest such claim) and shall not take Tax. If Lessee promptly (and, in any action with respect to such claim or Tax without the consent event, within 15 days of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such from the Indemnitee) requests the Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay so, the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)Lessee's expense, in good faith contest (or, at the Indemnitee's option, require Lessee to contest in Lessee's name, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of any such Taxes Tax. The Indemnitee shall determine in its sole discretion the forum in which the contest of such Tax shall be pursued and whether such contest shall be by (Xi) resisting payment thereof, if lawful and practicable, (Yii) not paying the same except under protest protest, if protest is necessary or advisable and proper proper, or (Ziii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings. If requested the Indemnitee determines that such contest shall be by the manner described in either of clauses (ii) or (iii) above, Lessee shall advance sufficient funds on an interest-free basis to do so by Lesseethe Indemnitee to make the payment required. If an Indemnitee contests the validity, applicability or amount of any Tax hereunder, Lessee shall have the right to participate in such contest at its own expense, including the right to attend governmental or judicial conferences concerning such claim for Tax and the right to review and advise the Indemnitee as to all material written submissions to any governmental or other authority relating to the Tax for which indemnification is sought. Notwithstanding the foregoing, the Indemnitee shall appeal only be required to contest (and Lessee shall only be permitted to contest) any adverse administrative or judicial decisionTax if (A) independent tax counsel selected by the Indemnitee is of the opinion that there is a reasonable basis for contesting the matter in question; (B) Lessee has acknowledged in writing its liability to indemnify the Indemnitee with respect to the Tax in question; (C) Lessee shall pay (and shall acknowledge in writing Lessee's liability to pay) the Indemnitee on demand for all reasonable costs and expenses incurred by such Indemnitee incurs in connection with contesting such claim (including, except without limitation, all costs, expenses, losses, reasonable legal and accounting fees (including fees associated with the Indemnitee's consultation with independent tax counsel as described herein), disbursements, penalties, interest and additions to tax); (D) the issue shall not be the same as an issue previously contested hereunder and decided adversely unless independent tax counsel selected by the Indemnitee is of the opinion that the applicable law has changed, and (E) the amount of Tax at issue exceeds $25,000. The Indemnitee shall not be required to pursue appeal any appeals judicial decision unless it receives an opinion of independent counsel selected by such Indemnitee to the effect that it is more likely than not that such appeal would be successful. Under no circumstances shall the Indemnitee be required to appeal a decision to or request a hearing by the United States Supreme Court. If and Nothing in this Section 12.5 shall require any Indemnitee to contest, or permit Lessee to contest, a claim with respect to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment imposition of such Indemnitee, adversely affecting such Indemnitee, any Tax if such Indemnitee shall permit Lessee waive its right to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this indemnification under Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee 12.3 with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 2 contracts
Sources: Aircraft Lease Agreement (Republic Airways Holdings Inc), Aircraft Lease Agreement (Republic Airways Holdings Inc)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 26.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 26.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within 30 days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 26.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), such if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of the preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien or Lessor Lien) on the Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on within ten (10) Business Days after demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv26.5(b)) is at least exceeds $3,000. Notwithstanding the foregoing500,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement, provided, however, that if the Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releaseat the Lessee's expense supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waive, suit or proceeding to the extent permitted by this Section 26.5(b). No Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b26.5 (and with respect to which contest is required under this Section 26.5(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 26.5 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 26.5 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 2 contracts
Sources: Lease (Brookdale Living Communities Inc), Lease Agreement (Brookdale Living Communities Inc)
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such against a Tax Indemnitee for any Taxes with respect to which the Lessee may be required to indemnify hereunderagainst hereunder (a "Tax Claim"), such Tax Indemnitee shall give the Lessee written notice of such Tax Claim promptly (but in any event within twenty (20) days) after its receipt, and shall furnish Lessee with copies of such Tax Claim and all other writings received from the taxing authority to the extent relating to such claim (but failure to so notify the Lessee shall relieve the Lessee of its obligations hereunder only to the extent it effectively precludes a contest of the claim). The Tax Indemnitee shall not pay such Tax Claim until at least thirty (30) days after providing the Lessee with such written notice, unless (a) the Tax Indemnitee is required to do so by law or regulation and (b) in the written notice described above, the Tax Indemnitee has notified the Lessee of such requirement. If requested by the Lessee in writing shall so request within 30 days after its receipt of such notice, then such Tax Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), shall in good faith at Lessee's expense contest (orsuch Tax; provided, if permitted by applicable lawhowever, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue contest involves only Taxes constituting property taxes, sales taxes, or issues from use taxes and does not involve any taxes or other issues arising in the same administrative or judicial proceeding that relating to a Tax Indemnitee which are unrelated to the transactions contemplated by the Operative Documents withoutAgreements and if no Equity Insufficiency Circumstance exists, such contest shall be undertaken by the Lessee at the Lessee's expense and at no-after-tax cost to the Lessor or the Owner Participant, but if such contest would involve any other type of Tax or any taxes or issues relating to a Tax Indemnitee which are 61 Participation Agreement (TRLI 2001-1B) unrelated to the transactions contemplated by Operative Agreements or if an Equity Insufficiency exists, then such Tax Indemnitee may, in its sole discretion, control such contest (including selecting the forum for such contest, and determining whether any such contest shall be conducted by (i) paying such Tax under protest or (ii) resisting payment of such Tax or (iii) paying such Tax and seeking a refund thereof; provided, further, however, that at such Tax Indemnitee's option, such contest shall be conducted by the Lessee in the name of such Tax Indemnitee). In no event shall such Tax Indemnitee be required or the Lessee be permitted to contest any Tax for which the Lessee is obligated to indemnify pursuant to this Section unless: (i) the Lessee shall have acknowledged in writing its liability to such Tax Indemnitee for an indemnity payment pursuant to this Section as a result of such claim if and to the extent such Tax Indemnitee or the Lessee, as the case may be, shall not prevail in the contest of such claim; provided, however, that the Lessee shall not be required to indemnify for such Taxes to the extent the results of the contest clearly and unambiguously demonstrate that the Tax is not an indemnified Tax; (ii) such Tax Indemnitee shall have received the opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Lessee furnished at the Lessee's sole expense, to the effect that a reasonable basis exists for contesting such claim or, in the good faith judgment event of such Indemniteean appeal of a court decision, adversely affecting such Indemniteethat it is more likely than not that an appellate court or an administrative agency with appellate jurisdiction, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In as the case of a contest controlled by an Indemniteemay be, such Indemnitee shall consult with Lessee in good faith regarding will reverse or substantially modify the manner of contesting such claim and shall keep Lessee reasonably informed regarding adverse determination; (iii) the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Tax Indemnitee on demand (and at no after-tax costs to the Lessor and the Owner Participant) all reasonable out-of-pocket costs and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimclaim (including, (B) if such contest shall involve the payment of the claimwithout limitation, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interestall costs, penalties expenses, reasonable legal and accounting fees, disbursements, penalties, interest and additions to tax the Tax); (iv) no Lease Default described in Section 14(a), 14(b), 14(g) or 14(h) of the Lease or a Lease Event of Default shall have occurred and shall have been continuing, unless the Lessee shall have posted a satisfactory bond or other security with respect thereto that are to the costs of such contest and the Taxes which may be required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee indemnified; (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (Cv) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk substantial danger of forfeituresale, sale forfeiture or loss of, or the creation of any Lien, or the Aircraft (unless Lessee shall have or otherwise made provisions a provision to protect the interests interest of any such Tax Indemnitee (in a manner satisfactory to such Tax Indemnitee), on the Equipment or any portion thereof or any interest therein; (Dvi) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of such claims alone, or, if the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case subject matter thereof shall be of a contest that is being pursued by an Indemniteecontinuing or recurring nature, the aggregate amount of the claim when aggregated with substantially identical potential claims shall be (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)A) is at least $3,0005,000 in the event of a Lessee controlled contest, or (B) $25,000 in the event of a Tax Indemnitee controlled contest; and (vii) if such contest shall be conducted in a manner requiring the payment of the claim, the Lessee shall have paid the amount required (and at no after-tax costs to the Lessor and the Owner Participant). Notwithstanding The Lessee shall cooperate with the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Tax Indemnitee with respect to such claim (any contest controlled and all directly related claims conducted by the Tax Indemnitee and claims based on the outcome Tax Indemnitee shall consult with the Lessee regarding the conduct of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such contest. The Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee cooperate with respect to any contest controlled and conducted by 62 Participation Agreement (TRLI 2001-1B) the Lessee and the Lessee shall consult with the Tax Indemnitee regarding the conduct of such contest. Notwithstanding anything to the contrary contained in this Section 7.1, no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing or recurring nature and shall have previously been adversely decided to the Tax Indemnitee pursuant to the contest provisions of this Section unless there shall have been a change in the law (including, without limitation, amendments to statutes or regulations, administrative rulings or court decisions) enacted, promulgated or effective after such claim shall have been so previously decided, and such Tax Indemnitee shall have received an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Lessee, furnished at the Lessee's sole expense, to the effect that such change is favorable to the position which such Tax Indemnitee or the Lessee, as the case may be, had asserted in such previous contest and as a result of such change, there is a reasonable basis to contest such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b)7.1, an a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without the Lessee's consent if such Tax Indemnitee (A) shall waive its right to indemnity under this Section 6(b), 7.1 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to the Lessee any amount previously paid or advanced by the Lessee pursuant to this Section 6(b) 7.1 with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 2 contracts
Sources: Participation Agreement (Trinity Industries Inc), Participation Agreement (Trinity Industries Inc)
Contests. If a any written claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to Section 19.2, such Tax Indemnitee shall promptly give notify Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 thirty (30) days following the receipt of after sending such notice by to Lessee; providedprovided that, however, thatin the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Tax Indemnitee shall not take no any action for as long as it is legally able with respect to do so such claim or Tax without the consent of Lessee (it being understood that an not to be unreasonably withheld) before ten (10) days from the receipt of such notice by Lessee unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-10 day period if (A)(I) the provided, that failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that notify Lessee shall have agreed not affect Lessee’s obligations to keep such information confidential other than indemnify hereunder except to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunderresultant harm suffered by Lessee. If requested by Lessee in writing a written request to such Tax Indemnitee within 30 thirty (30) days (or such shorter period referred to in the proviso to the first sentence in this Section 19.2(e) specified in such notice (but in any event not less than 10 days)) after its receipt of such notice, such Tax Indemnitee shallshall itself or, at such Tax Indemnitee’s request, the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)shall, in good faith contest (orincluding, if permitted without limitation, by applicable lawpursuit of appeals and administrative procedures), allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such indemnified Taxes by (XA) resisting payment thereof, (YB) not paying the same except under protest (which protest must be pursued using reasonable efforts in appropriate administrative and/or judicial proceedings) if protest is shall be necessary and proper or (ZC) if the payment is shall be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the proceedings; provided that in no event shall such Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue contest any appeals to claim for any Tax unless (1) the United States Supreme Court. If amount at issue (taking into account all similar and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated logically related claims with respect to the transactions contemplated by the Operative Documents without, that have been or could have been raised in an audit by the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee taxing authority in question for any other taxable period with respect to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case which an assessment of a contest controlled tax deficiency is not barred by an Indemniteea statute or limitations, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitationlimitations, any action regarding any appeal such claims that may arise in future periods) exceeds $25,000, (2) the Tax that is the subject of such contest is a Tax for which Lessee may have an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee indemnity obligation hereunder; (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A3) Lessee shall have agreed to pay such Tax Indemnitee and shall pay on demand an After-Tax Basis as incurred all reasonable out-of-pocket costs and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall incur in connection with contesting such claimclaim (including, without limitation, all reasonable costs, expenses, legal and accounting fees and disbursements); (B4) the action to be taken will not result in any material danger of an imminent sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) against the Property and that there is no risk that criminal or punitive civil liability may be imposed with respect to such Tax Indemnitee (other than any liability for any interest, penalties or additions to tax that may be assessed with respect to the Taxes that are the subject of such contest and as to which clauses (2) and (3) of this paragraph apply); (5) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest Tax Indemnitee on an interest-free basis and (with no additional net after-after tax cost to such Tax Indemnitee (and such Indemnitee shall promptly pay to Lessee without taking into account any net realized tax benefits resulting from any imputed interest deduction arising from savings associated with such interest free advance from Lessee plus any tax benefits resulting from making any such paymentadvance), ; (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D6) no Lease Event of Default under this Lease shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to (it being agreed that in such Indemnitee before proceeding with such contestcase, the amount of the Tax being contested, plus any interest and penalties and an amount estimated Indemnitee shall consult in good faith by with Lessee to determine whether Lessee can provide to the Tax Indemnitee reasonably satisfactory security to cover its indemnity obligations with respect to amounts to be contested and its obligations under the foregoing clause (5) of this proviso, in which case, such Indemnitee for reasonable expenses, Lease Event of Default shall not deprive Lessee of its contest rights hereunder); and (E7) in the case of a contest that is being pursued by an which must be contested in the name of the Tax Indemnitee, prior to initiating the aggregate amount contest the Lessee shall have furnished the Tax Indemnitee with an opinion of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased an independent tax advisor selected by the Owner Participant Lessee and reasonably acceptable to Lessee or raised in the Tax Indemnitee (“Tax Counsel”) to the effect that a reasonable basis exists for such contest. In no event shall the Tax Indemnitee be required to contest any other audit for which Lessee would claim if the subject matter of such claim shall be of a continuing nature and shall have previously been the subject of an indemnity obligation adverse final determination under the contest provisions of this Section 6(b)(iv)19.2(e) is at least $3,000. Notwithstanding after exercise by the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee of its rights pursuant to this Section 6(b19.2, unless the Lessee shall have delivered to such Tax Indemnitee an opinion of Tax Counsel to the effect that as a result of a change in law or fact it is more likely than not that the Tax Indemnitee will prevail in the contest of such claim. The relevant Tax Indemnitee shall control any contest unless the Tax Indemnitee requests that the Lessee control such contest or declines in writing to control such contest. The party conducting the contest (“Controlling Party”) without shall consult in good faith with the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee other party (“Noncontrolling Party”) and its counsel with respect to the contest of such claim for Taxes (and all directly related claims and claims based on or claim for refund) but the outcome decisions regarding what actions to be taken shall be made by the Controlling Party in its sole judgment (exercised in good faith). In addition, the Controlling Party shall keep the Noncontrolling Party reasonably informed as to the progress of such claim) shall terminate, subject to this Section 6(b)(iv)the contest, and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee provide the Noncontrolling Party with a copy of (or appropriate excerpts from) any amount previously paid reports or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable claims issued by the relevant auditing agents or taxing authority to the Controlling Party or any Affiliate thereof, in connection with respect such claim or the contest thereof. The Controlling Party shall be responsible for the selection of counsel, which counsel must be reasonably satisfactory to a refund of the Noncontrolling Party. If the lessee is the Controlling Party, the Controlling Party shall permit the Noncontrolling Party’s counsel to be present at all meetings (to the extent permitted by law, and the Controlling Party shall execute any necessary consents and take such Taxother actions as may be required to permit the Noncontrolling Party or its counsel to be present). Notwithstanding anything contained in this Section 6(b)19.2, an a Tax Indemnitee will shall not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim and may settle any contest without Lessee's the consent of Lessee if such Tax Indemnitee (A) shall waive its right to indemnity under this Section 6(b), 19.2 with respect to such claim for such Tax (and any directly related claim and made by any claim taxing authority with respect to other taxable periods that is based upon the outcome resolution of such claim, or the contest of which is determined based upon materially prejudiced by the outcome resolution of such claim) ), and (B) shall pay to Lessee any amount of Tax previously paid or advanced by Lessee pursuant to this Section 6(b) 19.2 with respect to such Taxclaim other than the costs and expenses of the contest of such claim paid by the Lessee, plus together with interest thereon at the rate underpayment rate, as defined in Section 6621 of the Code. Notwithstanding any of the foregoing in this Section 19.2(e), Lessee may, at any time and with notice to any Tax Indemnitee, contest the property or ad valorem Taxes for which the Lessee has an obligation to indemnify any Tax Indemnitee hereunder, provided Lessee complies with the contest provisions of Section 8.6 hereof. Each Tax Indemnitee shall, upon the Lessee’s reasonable request, execute any necessary consents and take such other actions as reasonably may be required to permit Lessee to conduct any such contest. If any Tax Indemnitee or any Affiliate thereof shall obtain a refund (including by way of credit) of all or any part of any Tax with respect to which the Lessee shall have paid on behalf of such Tax Indemnitee or reimbursed such Tax Indemnitee, then such Tax Indemnitee shall, so long as no Lease Event of Default shall have occurred and be continuing, pay to the Lessee any such refund (including any applicable interest received with respect to such refund or that would have been received with respect to such refund but for a counterclaim or other claim not indemnified by Lessee hereunder) plus any tax savings realized by such Tax Indemnitee as a result of a payment pursuant to this sentence (it being understood that the calculation of such tax savings shall take into account any additional income Taxes incurred by such Tax Indemnitee as a result of the receipt or accrual of such refund). A Tax Indemnitee shall not be obligated pursuant to this Section 19.2(e) to make a payment (i) before such time as the Lessee shall have made all payments then due under the Operative Documents and any Lease Event of Default that shall have occurred shall no longer be continuing or (ii) in excess of the amounts paid by Lessee to such Tax Indemnitee pursuant to this Section 19.2(e) in respect of the Taxes giving rise to such tax savings (minus any amounts previously paid to Lessee by such Tax Indemnitee pursuant to this Section 19.2(e) plus any applicable interest that would have been received with respect to such refund but for a counterclaim or other claim not indemnified by Lessee hereunder), provided that any such amounts not paid to Lessee pursuant to the limitation contained in clause (ii) of this sentence shall be carried forward to reduce, pro tanto, any future amounts that may become payable by the relevant taxing authority Lessee to such Tax Indemnitee pursuant to this Section 19.2(e) in respect of the Taxes giving rise to such tax savings. The disallowance, loss, recapture or reduction of any credit, refund or other tax savings with respect to which a refund Tax Indemnitee has made a payment to the Lessee under this Section 19.2(e) shall be treated as a Tax for which the Lessee is obligated to indemnify such Tax Indemnitee hereunder, without regard to the exclusions set forth in Section 19.2(b). The Tax Indemnitee shall make any payments to the Lessee under this Section 19.2(e) within ten (10) days of the receipt of such Taxrefund.
Appears in 2 contracts
Sources: Lease Agreement (Vistra Energy Corp), Lease Agreement (Vistra Energy Corp)
Contests. If a written claim is made against an Indemnitee In the event Purchaser or if any proceeding is commenced against an Indemnitee (including a Sellers receives written notice of such any examination, claim, settlement, proposed adjustment, administrative or judicial proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a other matter ("Tax is due for which Lessee could have an indemnity obligation hereunderClaim") related to any Pre-Closing Taxes, such Indemnitee Transfer Taxes or Overlap Period Taxes, Purchaser or Sellers, as the case may be, shall promptly give Lessee notice notify the other Parties in writing of such claim as soon as reasonably practical (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claimbut in no event more than ten (10) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the Business Days) after receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end notice. If Sellers notify Purchaser in writing within thirty (30) Business Days following receipt of such 30-day periodwritten notice they intend to exercise their rights pursuant to this Section 8.7, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee they shall be entitled to pay control the defense, prosecution, settlement or compromise of such Tax claimed Claim, at their own expense. Purchaser shall take such action in contesting such Tax Claim as Sellers shall reasonably request from time to time, including the selection of counsel and ▇▇▇ experts and execution of powers of attorney. Purchaser shall (a) not make any payments of such Tax Claim for a refund prior at least thirty (30) days (or such shorter period as may be required by applicable Law) after giving the notice required by this Section 8.7, (b) give the Sellers any information requested relating to such Tax Claim, (c) give any Tax Authority any information requested by Sellers relating to such Tax Claim, and (d) otherwise cooperate with and make internal resources available to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result Sellers in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary good faith in order to effectively contest the claim) furnish Lessee with copies of any requests such Tax Claim. Sellers shall reimburse Purchaser for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticereasonable, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs pre-approved by Sellers and demonstrated to Sellers' reasonable attorney and accountants fees), satisfaction that are incurred by Purchaser in good faith providing such assistance. Purchaser shall not settle or otherwise compromise any such Tax Claim with any Taxing Authority or prosecute such contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability a determination in court or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper other tribunal or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested initial or appellate jurisdiction unless instructed to do so by Lessee, the Indemnitee shall appeal Sellers. Any of the Sellers may settle or otherwise compromise any adverse administrative or judicial decisionsuch Tax Claim without Purchaser's prior written consent, except that if as a result of such settlement or compromise the Indemnitee Taxes payable by Purchaser would be materially increased, none of Sellers may settle or compromise such matter without Purchaser's prior written consent, which consent shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contestunreasonably withheld. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult connection with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination proceeding taken with respect to any claimsuch matters, (i) or settle or compromise any claim without the prior written consent Sellers shall keep Purchaser informed of Lessee all material developments and events relating to such matters if involving a material liability for Taxes and (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestii) unless (A) Lessee Purchaser shall have agreed the right, at its sole expense, to pay participate in any such Indemnitee proceedings. Purchaser shall cooperate with Sellers by giving them and their representatives, on demand prior reasonable notice, reasonable access and cooperation during normal business hours to all reasonable information, books and records pertaining to Transfer Taxes, Pre-Closing Taxes and Overlap Period Taxes. Sellers shall reimburse Purchaser for any reasonable, out-of-pocket costs pre-approved by Sellers and demonstrated to Sellers' reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto satisfaction that are required to be paid prior to the commencement of incurred by Purchaser in providing such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxassistance.
Appears in 2 contracts
Sources: Purchase Agreement (Pinnacle West Capital Corp), Purchase Agreement (Sierra Pacific Resources /Nv/)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.4, or if any Tax Indemnitee shall determine that any Imposition for which the Lessee may have an indemnity obligation pursuant to this Section 13.4 may be payable, such Tax Indemnitee shall promptly give (and in any event, within twenty (20) days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within twenty (20) days shall not affect Lessee's obligations hereunder alter such Tax Indemnitee’s rights under this Section 13.4, except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Lessee, unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-ten (10) day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimbe entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee’s expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim; provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in any of clause (x), such (y) or (z), if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of the preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of independent counsel that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Leased Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing, unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition, including all reasonable legal, accounting and investigatory fees and disbursements as well as the Impositions which are the subject of such claim to the extent the contest is unsuccessful, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs (including Taxes) to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.4(b)) is at least exceeds $3,000. Notwithstanding the foregoing50,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel, except, in the case of income taxes indemnified hereunder, which opinion shall be that of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgment; provided, however, that if the Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the non-controlling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releasesupply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waivesuit or proceeding to the extent permitted by this Section 13.4(b), and the Lessee shall promptly reimburse such Indemnitee for the reasonable out-of-pocket expenses of supplying such information and documents. Except during the occurrence of an Event of Default where Lessee and/or the Guarantors shall have failed to provide indemnity and, if requested by a Tax Indemnitee, collateral security, both in form, substance and in such amounts reasonably satisfactory to each Tax Indemnitee, no Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.4 (and with respect to which contest is required under this Section 13.4(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.4 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if (i) such Tax Indemnitee shall waive its right to indemnification under this Section 13.4 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claimyear or any other taxable year, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claimwaiver) or (ii) such Tax is the sole result of a claim of a continuing and (B) shall pay to Lessee any amount consistent nature, which claim has previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by resolved against the relevant taxing authority with respect Tax Indemnitee (unless a change in law or facts has occurred since such prior adverse resolution and Lessee provides an opinion of independent tax counsel to the effect it is more likely than not that such change in law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
Appears in 2 contracts
Sources: Participation Agreement (Regeneron Pharmaceuticals Inc), Participation Agreement (Regeneron Pharmaceuticals Inc)
Contests. If a written claim is made against an Indemnitee or if (a) After the Closing, the Purchaser shall promptly notify the Seller in writing of any proceeding is commenced against an Indemnitee (including a written notice of such proceedingthe commencement of any Action or proposed assessment or Claim made against, or with respect to, the Purchaser, its Affiliates or the Company or any Subsidiary which (i) for Taxes as relates to which Lessee a Pre-Closing Period or a Straddle Period of the Company or any Subsidiary or (ii) if determined adversely to the taxpayer, could be liable grounds for payment or indemnity hereunder, or if an Indemnitee makes indemnification under this Article VII (a determination that a “Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (Action”); provided, however, that the failure to provide give such notice shall will not affect Lessee's obligations hereunder the Purchaser’s right to indemnification under this Article VII except to the Owner Participant unless extent that such failure shall materially adversely affect prejudices the right Seller.
(b) In the case of a Tax Action (other than a Tax Action that relates to contest such claim) and shall not take any action a Straddle Period with respect to such claim or Tax without a Stand-Alone Return), the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, Seller (and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(Iits authorized representatives) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shallright, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)its expense, in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of the Tax Action; the Purchaser (and its authorized representatives) may also, at its expense, participate in, but not control, any such proceeding and shall provide to Lessee such information or data Tax Action that is solely related to a Stand-Alone Return and, if the Seller does not assume the defense of a Tax Action, the Purchaser (or its authorized representative) may defend the same in such Indemnitee's control or possession that is reasonably necessary to conduct such contestmanner as it may deem appropriate. In the case of a contest controlled by an IndemniteeTax Action that relates to a Straddle Period with respect to a Stand-Alone Return, the Purchaser (and its authorized representatives) shall have the right, at its expense, to control the Tax Action; the Seller (and its authorized representatives) may also, at its expense, participate in, but not control, any such Indemnitee shall consult with Lessee Tax Action and, if the Purchaser (or its authorized representative) does not assume the defense of any such Tax Action, the Seller (and its authorized representatives) may defend the same in good faith regarding such manner as it may deem appropriate.
(c) Notwithstanding anything to the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by contrary in this Section 6(b)(iv) (including7.04, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) taxable period that begins before the Closing Date, neither the Purchaser nor the Seller shall enter into any compromise or agree to settle any Tax Action which would adversely affect the other party for such taxable period or compromise any claim a subsequent taxable period without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv))the other party, which consent may not be unreasonably withheld, conditioned or delayed. Notwithstanding The Purchaser and the foregoingSeller agree to cooperate, and the Purchaser agrees to cause the Company and the Subsidiaries to cooperate, in no event shall an Indemnitee be required to pursue any contest (the defense against or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxAction.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Crown Castle International Corp), Stock Purchase Agreement (Quanta Services Inc)
Contests. If a written any claim is shall be made against an any Tax Indemnitee -------- or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section ------- 26.5, or if any Tax Indemnitee shall determine that any Imposition to which ---- the Lessee may have an indemnity obligation pursuant to this Section 26.5 ------------ may be payable, such Tax Indemnitee shall promptly give (and in any event, within 30 days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so -------- notify the Lessee within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 26.5 except to the Owner Participant unless extent such failure shall precludes ------------ or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, that-------- ------- that in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from the Tax Indemniteee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), such if -------- ---------- the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee -------- acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that -------- ------- in determining the application of clauses (x) and (y) of the preceding ----------- --- sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien or Lessor Lien) on the Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on within ten (10) Business Days after demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv)26.5(b) is at least --------------- exceeds $3,000. Notwithstanding the foregoing500,000 and (B) unless, if any requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee shall release, waive, compromise or settle any claim an opinion of counsel selected by the Lessee (which may be indemnifiable in-house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement, provided, however, that -------- ------- if the Tax Indemnitee is the controlling party and the Lessee pursuant to this Section 6(b) without recommends the written permission acceptance of Lessee, Lessee's obligation a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim (or the contest thereof. Each Tax Indemnitee shall at the Lessee's expense supply the Lessee with such information and all directly related claims and claims based on documents reasonably requested by the outcome of such claim) shall terminateLessee as are necessary or advisable for the Lessee to participate in any action, subject suit or proceeding to the extent permitted by this Section 6(b)(iv26.5(b), and subject . No Tax Indemnitee --------------- shall enter into any settlement or other compromise or fail to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee appeal an adverse ruling with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right which is entitled to indemnity be indemnified under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.------- -38-
Appears in 1 contract
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceedinga) for Taxes as to which Lessee could be liable for payment or indemnity hereunderAfter the Closing, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee Purchaser shall -------- promptly give Lessee notice notify Seller in writing of the commencement of any Tax audit or administrative or judicial proceeding or of any demand or claim on Purchaser or any Company which, if determined adversely to the taxpayer or after the lapse of time, would be grounds for indemnification under Section
7.01. Such notice shall contain factual information (to the extent known) describing the asserted Tax liability in reasonable detail and shall include copies of any notice or other document received from any Tax authority in respect of any such asserted Tax liability. If Purchaser fails to give Seller prompt notice of an asserted Tax liability as required by this Section 7.03, then (a) if Seller is precluded by the failure to give prompt notice from contesting the asserted Tax liability in both the administrative and judicial forums, then Seller shall not have any obligation to indemnify for any loss arising out of such asserted Tax liability, and (b) if Seller is not so precluded from contesting but such failure to give prompt notice results in a detriment to Seller, then any amount which Seller is otherwise required to pay Purchaser pursuant to
Section 7.01 with respect to such liability shall be reduced by the amount of such detriment.
(b) Seller may elect to direct, through counsel of its own choosing and at its own expense, any audit, claim for refund and administrative or judicial proceeding involving any asserted liability with respect to which indemnity may be sought under Section 7.01 (any such audit, claim for refund or proceeding relating to an asserted Tax liability is referred to herein as a "Contest"). If Seller elects to direct a Contest, it shall within 30 days of -------- receipt of the notice of asserted Tax liability notify Purchaser of its intent to do so, and Purchaser shall cooperate and shall cause each Company to cooperate, at the expense of Seller, in each phase of such Contest. Seller shall keep Purchaser informed regarding the progress but not any substantive aspect of any Contest which Seller has elected to direct. If Seller elects not to direct the Contest, fails to notify Purchaser of its election as herein provided or contests its obligation to indemnify under Section 7.01, Purchaser or the relevant Company may pay, compromise or contest, at its own expense, such asserted liability. However, in such case, neither Purchaser nor such Company may settle or compromise any asserted liability over the objection of Seller; provided, however, that the failure consent to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim settlement or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee compromise shall not be required to pursue -------- ------- unreasonably withheld. In any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents withoutevent, Seller may participate, at its own expense, in the good faith judgment of such IndemniteeContest. If Seller chooses to direct the Contest, adversely affecting such Indemnitee, such Indemnitee Purchaser shall permit Lessee to control the conduct of any such proceeding promptly empower and shall provide cause the relevant Company promptly to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case empower (by power of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting other documentation as may be appropriate) such claim, (B) if such contest shall involve the payment representatives of the claim, Lessee shall advance the amount thereof plus (Seller as it may designate to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (represent Purchaser and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) Company in the case of a contest that is being pursued by Contest insofar as the Contest involves an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit asserted Tax liability for which Lessee Seller would have an indemnity obligation be liable under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax7.01.
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 26.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 26.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within 30 days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 26.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), such if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of the preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien or Lessor Lien) on the Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on within ten (10) Business Days after demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv26.5(b)) is at least exceeds $3,000. Notwithstanding the foregoing500,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in- house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement, provided, however, that if the Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releaseat the Lessee's expense supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waive, suit or proceeding to the extent permitted by this Section 26.5(b). No Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b26.5 (and with respect to which contest is required under this Section 26.5(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 26.5 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 26.5 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 1 contract
Contests. If Whenever any taxing authority makes a written assertion of a claim is made against an Indemnitee for or dispute regarding, or assessment of, Taxes for which the Indemnifying Securityholders are liable or required to provide indemnification under this Article VI, the Buyer shall, if any proceeding is commenced against an Indemnitee (including a written notice informed of such proceedingan assertion or assessment, inform the Indemnifying Securityholders within fifteen (15) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (business days; provided, however, that the any failure to provide such notice inform the Indemnifying Securityholders shall not affect Lessee's obligations hereunder relieve the Indemnifying Securityholders of their obligation to provide the Owner Participant unless such failure indemnity required hereunder. The Indemnifying Securityholders shall materially adversely affect have the right to contest control any resulting proceedings and to determine whether and when to settle any such claim) and shall not take any action with respect to such claim , assessment or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than dispute to the extent necessary in order to contest such proceedings or determinations affect the claim) furnish Lessee with copies amount of any requests Taxes for information from any taxing authority relating to such Taxes with respect to which Lessee may be the Indemnifying Securityholders are liable or required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except provide indemnification under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decisionthis Article VI, except that the Indemnitee Buyer shall have the right to consent to any settlement to the extent such proceedings or settlement could reasonably be expected to affect the amount of Taxes imposed on the Buyer, the Surviving Corporation or any Subsidiary for taxable periods or portions thereof beginning after the Pre-Closing Tax Periods. Whenever any taxing authority makes a written assertion of a claim for or dispute regarding, or assessment of, Taxes for which the Buyer is liable or required to provide indemnification under this Article VI, the Indemnifying Securityholders shall, if informed of such assertion or assessment, inform the Buyer within fifteen (15) business days; provided, that any failure to inform the Indemnifying Securityholders shall not relieve the Indemnifying Securityholders of their obligation to provide the indemnity required hereunder. The Buyer shall have the right to control any resulting proceedings and to determine whether and when to settle any such claim, assessment or dispute, except that the Indemnifying Securityholders shall have the right to consent, which consent shall not be required unreasonably withheld, to pursue any appeals to the United States Supreme Court. If and settlement to the extent the Indemnitee is able such proceedings could reasonably be expected to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, materially affect the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit Taxes for which Lessee would have an indemnity obligation the Indemnifying Securityholders are liable under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under provide indemnification this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxAgreement.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Brookdale Senior Living Inc.)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.4, or if any Tax Indemnitee shall determine that any Imposition for which the Lessee may have an indemnity obligation pursuant to this Section 13.4 may be payable, such Tax Indemnitee shall promptly give (and in any event, within 15 days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within 15 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.4, except to the Owner Participant unless extent such failure shall materially adversely affect effectively precludes the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee, unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest such Impositions, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in any of clause (x), such (y) or (z) if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee is reasonably likely to have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, further, that in determining the application of clauses (x) and (y) of this sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Impositions for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of independent counsel that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Asset or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing, unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Impositions subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An claim, (C) unless the Lessee shall have provided the Tax Indemnitee with a written acknowledgement of liability if the contest shall prove unsuccessful (provided, however, that such acknowledgement shall not fail be binding if the contest is finally resolved on a basis from which it can be established that the Lessee would not have been liable to take any action expressly required by this Section 6(b)(iv) the Tax Indemnitee for an indemnity in the absence of such acknowledgment), (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestD) unless (A) the Lessee shall have agreed to pay and shall pay (provided, that prior to the Applicable Base Term Commencement Date for such Facility or Equipment Group and pursuant to the terms and conditions in this Participation Agreement relating to Advances, Lessee shall request an Advance the proceeds of which shall be used to pay) to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition, including all reasonable legal, accounting and investigatory fees and disbursements as well as the Impositions which are the subject of such claim to the extent the contest is unsuccessful, or (BE) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Impositions prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs (including Taxes) to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition, for Tax Indemnitee controlled contests, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.4(b)) is at least exceeds $3,000. Notwithstanding the foregoing25,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel, except, in the case of income taxes indemnified hereunder, which opinion shall be that of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Impositions (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgment, provided, however, that if the Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Impositions subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releasesupply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waivesuit or proceeding to the extent permitted by this Section 13.4(b), and the Lessee shall promptly reimburse such Indemnitee for the reasonable out-of-pocket expenses of supplying such information and documents. Except during the occurrence of an Event of Default where Lessee and the Guarantors shall have failed to provide indemnity and, if requested by an Indemnitee, collateral security, both in form, substance and in such amounts reasonably satisfactory to each Indemnitee, no Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.4 (and with respect to which contest is required under this Section 13.4(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.4 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to any Imposition if (i) such Tax Indemnitee shall waive its right to indemnification under this Section 13.4 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claimyear or any other taxable year, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claimwaiver) or (ii) such Imposition is the sole result of a claim of a continuing and (B) shall pay to Lessee any amount consistent nature, which claim has previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by resolved against the relevant taxing authority with respect Tax Indemnitee (unless a change in law or facts has occurred since such prior adverse resolution and Lessee provides an opinion of independent tax counsel to the effect that it is more likely than not that such change in law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
Appears in 1 contract
Sources: Participation Agreement (PPL Electric Utilities Corp)
Contests. If (a) In the event a written claim is shall be made against an Indemnitee or by the IRS in writing that, if any proceeding is commenced against an Indemnitee (including successful, would result in a written notice of such proceeding) Loss for Taxes as to which Lessee the Facility Sublessee could be liable for payment or indemnity hereunderrequired to indemnify the Owner Participant, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall the Owner Participant hereby agrees promptly give Lessee notice to notify the Facility Sublessee in writing of such claim and (provided, however, that except as otherwise provided below) agrees to contest such claim (or cause the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right Facility Lessor to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, the appeal of any action regarding any judicial determination in respect of such claim); PROVIDED, HOWEVER, that:
(i) within 30 days after notice of such claim by the Owner Participant to the Facility Sublessee, the Facility Sublessee shall deliver in writing a request that such claim be contested;
(ii) Oglethorpe shall, at the commencement of the contest and before each level of judicial proceedings, have delivered to the Owner Participant, at the Facility Sublessee's sole expense, a written opinion of independent tax counsel selected by the Owner Participant and reasonably satisfactory to Oglethorpe to the effect that there is a Reasonable Basis for contesting such action, or proposed action, by the IRS (or in the case of an appeal of an adverse judicial decision, the Facility Sublessee shall have furnished the Owner Participant with an opinion from such independent tax counsel, at Facility Sublessee's sole expense, to the effect that it is more likely than not that such determination will be reversed or substantially modified upon appeal in a manner favorable to the Owner Participant);
(iii) the anticipated amount of indemnification payments that would be payable with respect to all claims raised in the same audit (together with the amount of all similar and logically related claims that have been or could be raised in any claimother current or potential future audit of the Owner Participant with respect to the Undivided Interest) equals or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest exceeds $100,000 (or to permit Lessee to pursue any contest$250,000 in the case of an appeal of a judicial decision) unless in the aggregate;
(Aiv) Lessee the Facility Sublessee shall have agreed in writing to pay such Indemnitee (and shall pay on demand demand) to the Owner Participant all reasonable out-of-pocket costs and reasonable attorney and accountants fees expenses that such Indemnitee the Owner Participant shall incur in connection with contesting such claim, including attorneys', accountants' and other professional fees and disbursements;
(Bv) the Owner Participant may, at its sole option, either pay the tax claimed and s▇▇ for a refund or contest the claim in any permissible forum considering, however, in good faith such requests as the Facility Sublessee and its counsel shall make concerning the most appropriate forum in which to proceed and other related matters;
(vi) if such contest the Owner Participant shall involve choose to pay the payment of tax claimed and s▇▇ for a refund, the claim, Lessee Facility Sublessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest Owner Participant on an interest-free basis and with no additional net after-tax cost to the Owner Participant sufficient funds to pay the tax and interest, penalties and additions to tax payable with respect thereto (to the extent such Indemnitee amount is indemnified against pursuant to Section 4 of this Agreement);
(and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (Dvii) no Lease Payment Default, Bankruptcy Default or Event of Default under the Facility Lease, or Sublease Payment Default, Sublease Bankruptcy Default or Sublease Event of Default shall have occurred and be continuing at continuing;
(viii) the time Facility Sublessee shall acknowledge in writing its liability to indemnify the Owner Participant under this Agreement in respect of such claim if the contest is begun unless Lessee has provided security for its obligations hereunder not successful; PROVIDED that such acknowledgment of liability will not be binding if the contest is resolved by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case final decision of a contest court of competent jurisdiction on a clearly articulated basis which establishes that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could Facility Sublessee would not be raised with any or all of the other Aircraft leased by responsible to indemnify the Owner Participant under Section 4 of this Agreement in the absence of such acknowledgment; and
(ix) the Owner Participant shall not be required to Lessee or raised pursue any contest to the United States Supreme Court.
(b) The Owner Participant shall not settle any such claim described in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b7(a) without the written permission of Lessee, LesseeFacility Sublessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on consent; provided that the outcome of such claim) Owner Participant shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest any proposed adjustment and may settle any such proposed adjustment if the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) Owner Participant shall waive its right to indemnity under this Section 6(b), Agreement with respect to such Tax (adjustment and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee the Facility Sublessee any amount previously paid or advanced by Lessee the Facility pursuant to this Agreement with respect to such adjustment or the contest of such adjustment (other than amounts paid or advanced pursuant to this Section 6(b7(a)(iv)).
(c) The Owner Participant (i) shall not make payment of any claim for at least 30 days after the giving of written notice of such claim to the Facility Sublessee if such forbearance is permitted by law and shall inform the Facility Sublessee in reasonable detail of the nature and extent of and purported basis (to the extent of the Owner Participant's knowledge thereof) for such claim, (ii) shall consult with and consider in good faith the Facility Sublessee's suggestions regarding the conduct of such contest (but the manner in which such contest is conducted shall be determined in all respects by the Owner Participant in its sole discretion) and shall keep the Facility Sublessee reasonably informed as to the progress of such contest, and (iii) shall at the request of the Facility Sublessee permit the Facility Sublessee and its counsel to review and make suggestions on all submissions to the IRS and any court to the extent such submissions relate to the Loss (it being understood that the Facility Sublessee shall not be permitted to review any portions of such submissions that relate to issues unrelated to the transactions contemplated by the Operative Documents). The Facility Sublessee and its counsel shall maintain confidentiality with respect to all such Taxinformation.
(d) If the Facility Sublessee shall have requested the Owner Participant to contest such claim as above provided and shall have duly complied with all the terms of this Section 7, plus interest the Facility Sublessee's liability for indemnification under Section 5 of this Agreement shall, at the rate that would have been payable by Facility Sublessee's election, be deferred until a Final Determination of the relevant taxing authority with respect to a refund liability of the Owner Participant. At such time, the Facility Sublessee shall become obligated for the payment of any indemnification hereunder not theretofore paid resulting from the outcome of such Taxcontest, and the Owner Participant shall become obligated to repay to the Facility Sublessee the amount of any interest-free advance made pursuant to this Section 7(a)(vi) together with any interest received by or credited to the Owner Participant that is attributable to such advance. Such obligations of the Owner Participant and the Facility Sublessee will first be set off against each other, and any difference owing by any party shall be paid within 30 days after such Final Determination.
(e) The Owner Participant shall also not be required to contest any proposed adjustment if the subject matter thereof shall be of a continuing nature and there shall
Appears in 1 contract
Sources: Tax Indemnification Agreement (Oglethorpe Power Corp)
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a Parent agrees to give prompt written notice to Stockholder Representative of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such any written notice by Lesseethe Company, Parent or any of Parent’s Affiliates which involves the assertion of any claim, or the commencement of any Action, in respect of which an indemnity may be sought by Parent pursuant to this ARTICLE VI or which could otherwise result in material Losses to the parties represented by the Stockholder Representative (a “Tax Claim”); provided that any failure to comply with this provision shall reduce Parent’s right to indemnification hereunder only to the extent it adversely affects the ability of the of the Stockholder Representative to contest any Tax Claim relating to such notice. Stockholder Representative (on behalf of the Stockholders, Optionholders and Warrantholders) shall be entitled, at its election, to control the contest or resolution of any Tax Claim relating entirely to Taxes attributable to Pre-Closing Tax Periods; provided, however, that, if such Indemnitee that Stockholder Representative shall be required by law to take action prior to keep Parent informed in all material respect of the end statue of such 30-day periodTax Claim; and provided, such Indemnitee shallfurther, in such notice to Lessee, so inform Lessee, and such Indemnitee that Stockholder Representative shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee the Parent (except as contemplated by this Section 6(b)(iv)). Notwithstanding which consent shall not be unreasonably withheld or delayed) before entering into any settlement of a claim or ceasing to defend such claim and; provided further, that the foregoing, Parent shall be entitled to participate in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement defense of such claim and to employ counsel of its choice for such purpose, the fees and expenses of which separate counsel shall be borne solely by Parent. Parent shall control the contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests resolution of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest Claim that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation Stockholder Representative does not control under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing6.06; provided, if any Indemnitee that Parent shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with keep Stockholder Representative informed in all material respect to the status of such Tax Claim; and provided, further, that Parent shall obtain the prior written consent of the Stockholder Representative (which consent shall not be unreasonably withheld or delayed) before entering into any settlement of a claim or ceasing to defend such claim (and all directly related claims and claims based on and; provided further, that the outcome Stockholder Representative shall be entitled to participate in the defense of such claim) shall terminateclaim and to employ counsel of its choice for such purpose, subject to this Section 6(b)(iv), the fees and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund expenses of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and which separate counsel shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee borne solely by Stockholder Representative (A) shall waive its right to indemnity under this Section 6(bon behalf of the Stockholders, Optionholders and Warrantholders), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 1 contract
Contests. If a written Except as otherwise provided in Section 12.1 of the Master Lease with respect to Property Taxes, if any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could the Lessees may have an indemnity obligation hereunderpursuant to this Section 13.5, or if any Tax Indemnitee shall receive notice that any Imposition to which the Lessees may have an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax Indemnitee shall promptly give Lessee notice (and, in any event, within 30 days) notify the Company, as agent for the Lessees, in writing of such claim (provided, however, provided that the failure to provide such notice so promptly notify the Company within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of Lessee the Company, as agent for the Lessees, (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by Lesseethe Company or thereafter if the applicable Lessee has commenced to take appropriate action; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the applicable Lessee, so inform Lesseethe Company, as agent for the Lessees, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Company, as agent for as long as it is legally able the Lessees, (such consent not to do so (it being understood that an be unreasonably withheld or unreasonably delayed) for 10 days after the receipt of such notice by the Company or thereafter if the applicable Lessee has commenced to take appropriate action, unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period. The Company shall be entitled for a period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from such Tax Indemnitee (or such shorter period as such Tax Indemnitee has notified the Lessees is required by law or regulation for such Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense of the applicable Lessee. If (x) such contest can be pursued in the name of the applicable Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the applicable Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of such Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the applicable Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if such Tax Indemnitee so requests, then the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee applicable Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), if such Tax Indemnitee shall consult with Lessee determines reasonably and in good faith regarding that such contest by the manner applicable Lessee could have a material adverse impact on the business or operations of contesting such Tax Indemnitee and provides a written explanation to such Lessee of such determination, such Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, the applicable Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) above, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the applicable Lessee indemnifies hereunder from Taxes for which the applicable Lessee is not obligated to indemnify hereunder, so that the applicable Lessee can control the contest of the former. In all other claims requested to be contested by the Company, as agent for the Lessees, such Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Company, as agent for the Lessees. In no event shall the applicable Lessee be permitted to contest (or such Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the applicable Lessee with a legal opinion of counsel reasonably acceptable to the applicable Lessee that such action, suit or proceeding involves a material risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Property or any part of any thereof unless the applicable Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing unless the applicable Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the applicable Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the applicable Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of contest, unless the applicable Lessee shall provide to such contest on Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition for Tax Indemnitee controlled contests and claims contested in the name of such Tax Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee with respect to any period for which the applicable Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.5(b)) exceeds $25,000 and (B) unless, if requested by such Tax Indemnitee, the applicable Lessee shall have provided to such Tax Indemnitee an opinion of counsel selected by the Company (which may be in-house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by such Tax Indemnitee and reasonably acceptable to the applicable Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement, provided, however, that if such Tax Indemnitee is the controlling party and the applicable Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the applicable Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall at least $3,000the applicable Lessee's expense supply the applicable Lessee with such information and documents reasonably requested by the Company as are necessary or advisable for the applicable Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 13.5(b). Notwithstanding anything in this Section 13.5(b) to the foregoingcontrary, if any no Tax Indemnitee shall release, waive, enter into any settlement or other compromise or settle fail to appeal an adverse ruling (which appeal has been requested in writing by the applicable Lessee) with respect to any claim which may be indemnifiable by Lessee pursuant entitled to be indemnified under this Section 6(b) 13.5 without the prior written permission consent of the applicable Lessee, Lessee's obligation such entering into of a settlement or compromise, or such failure to indemnify appeal, without such consent, shall constitute a waiver of all rights to indemnification under this Section 13.5 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the applicable Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive in writing, in a form acceptable to the Lessees, its right to indemnification under this Section 13.5 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 26.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 26.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within 30 days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 26.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto provided that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest described in clause (y), if the Tax Indemnitee determines in good faith that is being pursued such contest by an Indemniteethe Lessee could have a material adverse impact on the business or operations of the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the aggregate amount Tax Indemnitee may elect to control or reassert control of the claim (together with the amount of all similar or logically related claims contest, and provided, that have been or could be raised with any or all by taking control of the other Aircraft leased contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome reason of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii)provided, such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claimfurther, plus interest at that in determining the rate that would have been payable by the relevant taxing authority with respect to a refund application of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee clauses (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claimx) and (By) of the preceding sentence, each Tax Indemnitee shall pay take any and all reasonable steps to segregate claims for any Taxes for which the Lessee any amount previously paid or advanced by indemnifies hereunder from Taxes for which the Lessee pursuant is not obligated to this Section 6(b) with respect to such Taxindemnify hereunder, plus interest at so that the rate that would have been payable by Lessee can control the relevant taxing authority with respect to a refund contest of such Tax.the
Appears in 1 contract
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as with respect to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice so notify Lessee shall not affect Lessee's relieve Lessee of its indemnity obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to notify effectively forecloses Lessee's rights to require a contest of such claim) and shall not take any no action with respect to such claim or Tax without the prior written consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, howeverthat, thatin the case of a claim made against an Indemnitee, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an a Indemnitee shall be entitled to pay the Tax claimed and ▇s▇▇ for a refund prior to the end of such 30-day period if (A)(Ii)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not materially prejudice the right to contest or (IIB) the failure to so pay would result in criminal penalties and (Bii) such Indemnitee shall act take any action so required in connection with so paying the Tax in the a manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided provided, that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority Taxing Authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney attorneys' and accountants accountants' fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (XI) resisting payment thereof, (YII) not paying the same except under protest if protest is necessary and proper or (ZIII) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents Agreements without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee (at Lessee's cost and expense) with such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an a Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (Ai) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney attorneys' and accountants fees that such Indemnitee shall incur in connection with contesting such claimaccountants' fees, (Bii) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after- Tax basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to the Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus including any tax benefits resulting from making any such payment), (Ciii) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee in a manner reasonably satisfactory to such Indemnitee) (provided, that such Indemnitee agrees to notify Lessee in writing promptly after it becomes aware of any such risk), (Div) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (Ev) in prior to commencing any judicial action controlled by Lessee, Lessee shall have acknowledged its liability for such claim hereunder, provided that Lessee shall not be bound by its acknowledgment if the case Final Determination articulates conclusions of a contest law and fact that is being pursued by an Indemnitee, demonstrate that Lessee has no liability for the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000contested amounts hereunder. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv6(b)(iii), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority Taxing Authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an a Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (Ai) shall waive its right to indemnity under this Section 6(b), ) with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and ), (Bii) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Lessee the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.
Appears in 1 contract
Contests. If a written claim is made against an any Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as with respect to which the Lessee could be is liable for a payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly (but in any event within 30 days of receipt thereof) give the Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without furnish the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any written requests for information sent to such Indemnitee (and not the Lessee) from any taxing authority to the extent relating to such Taxes with respect to which the Lessee may be required to indemnify hereunder. If requested hereunder and with respect to which it would be necessary or beneficial to have information provided by Lessee in writing within 30 days after its receipt the Lessee; provided, however, that the failure of an Indemnitee to give such notice or furnish such copy shall not terminate any of the rights of such noticeIndemnitee under this Article 8, except (a) to the extent that the Lessee's contest rights have been materially and adversely impaired by the failure to provide such Indemnitee shallnotice or copy or (b) to the extent that such failure results in the imposition of, or an increase in the amount of, any penalties, interest or additions to Tax related to the Tax which is the subject of such claim or proceeding. The Lessee may, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)its option, contest in good faith contest (its own name or, if permitted required by applicable law, allow Lessee require the Indemnitee to contest) through appropriate administrative contest in good faith, with due diligence and judicial proceedings at the Lessee's expense, if timely requested in writing by the Lessee, the validity, applicability or amount of such Taxes by by:
(Xi) resisting payment thereof, (Y) thereof if lawful and practicable or not paying the same except under protest if protest is necessary and proper in each case so long as non-payment will not result in a material risk of the sale, forfeiture or loss of, or the creation of a Lien other than a Permitted Lien on the Aircraft, Airframe or any Engine or any risk of criminal liability; or
(Zii) if the payment is be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings. Notwithstanding the foregoing, the Lessee shall not be permitted or entitled to contest any such Tax in its own name unless the Tax is reflected in a report or a return of the Lessee or raised in an audit or other proceeding of the Lessee and the Lessee is allowed to directly contest such Tax under applicable law of the taxing jurisdiction provided, that if the Lessee is so permitted under applicable law to contest a Tax asserted against the Lessee and the same or similar Tax is also asserted against the Indemnitee, each of the Lessee and such Indemnitee shall conduct its contest in its own name and the Lessee and such Indemnitee will cooperate in a reasonable manner with respect to the respective contests of such Tax. If requested the Indemnitee, after reasonable discussion with the Lessee and consideration in good faith of any suggestion made by the Lessee as to do so by the method of pursuing such contest, elects to conduct the contest, such Indemnitee shall control the contest and shall determine the manner in which to contest such Taxes and shall periodically or upon the Lessee's request advise the Lessee of the progress of such contest; provided, however, that the Lessee shall have the right to be consulted in good faith with respect to any contest of claims subject to indemnification hereunder, including governmental and judicial conferences and the right to be consulted in good faith regarding the relevant portions of all related submissions to any governmental or other authority, provided, however, that the Lessee shall be permitted to participate in any such contest only (x) with respect to issues that can be separated on audit from any Taxes for which the Lessee is not required to indemnify the Indemnitee hereunder, and (y) if the Indemnitee shall appeal have determined that in its judgment, exercised in its sole discretion, neither such participation nor the separation of issues will adversely affect the Indemnitee. Notwithstanding the foregoing provisions of this paragraph, if the Lessee acknowledges in writing its liability to the Indemnitee hereunder with respect to the Taxes subject to the contest if the contest is resolved adversely, the Lessee shall control such contest. If the Lessee satisfies the conditions imposed on it in this Section 8.04 and an Indemnitee nevertheless fails to contest and refuses to permit the Lessee to contest under and as and to the extent required by this Section 8.04, then the Lessee shall not be obligated to indemnify such Indemnitee for such claim or for any adverse administrative other claim for which a successful contest is adversely affected because of such failure to contest or judicial decisionto permit a contest. The Indemnitee will not settle a contest that results in a final determination without consent of the Lessee, except that unless the Indemnitee waives its right to indemnification with respect to such contest and any related contest. Any such settlement, concession, or compromise without the prior written consent of the Lessee shall constitute a waiver of such Indemnitee's rights to indemnification hereunder with respect to such claim and any other claim for which a successful contest is adversely affected because of such settlement, concession, or compromise. Notwithstanding the preceding sentences of this Section 8.04, such Indemnitee shall not be required to pursue take or continue any appeals action unless the Lessee shall have (i) agreed in writing to pay and shall pay the Indemnitee on a current basis and on an After-Tax Basis all reasonable fees and expenses (including reasonable attorneys' fees and accountants' fees) which such Indemnitee may incur as a result of contesting such Taxes, and (ii) made all payments and indemnities (other than contested payments and indemnities) then due to the United States Supreme Court. If and Indemnitee hereunder or with respect to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to any of the transactions contemplated by or under the Operative Documents without, in Agreements. In no event shall such Indemnitee be required or the good faith judgment Lessee be permitted to contest pursuant to this Section 8.04 the imposition of such Indemnitee, adversely affecting such Indemnitee, any Tax for which the Lessee is obligated to indemnify any Indemnitee hereunder unless (i) such Indemnitee shall permit Lessee to control have received, at the conduct Lessee's expense, an opinion of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In tax counsel selected by the case of a contest controlled by an IndemniteeLessee, such counsel to be reasonably satisfactory to the Indemnitee shall consult with Lessee in good faith regarding ("Tax Counsel"), to the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all effect that there exists a reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with basis for contesting such claim, (Bii) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeitureloss, sale or loss forfeiture of, or the creation of a Lien (other than Permitted Liens) on, the Aircraft or any part thereof or interest thereon or in a risk of criminal liability, or adversely affect the Trust Indenture Estate, (unless iii) if a Specified Default exists, the Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing reasonably satisfactory to the Indemnitee, (iv) if such contest shall be conducted in a manner requiring payment of the claim in advance, the Lessee shall have advanced sufficient funds, on an interest free basis, to make the payment required, and agreed to indemnify the Indemnitee against any additional net adverse tax consequences on an After-Tax Basis to such Indemnitee before proceeding with of such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expensesadvance, and (Ev) the issue shall not be the same as an issue previously contested hereunder and decided adversely, unless the Indemnitee shall have received at the Lessee's sole expense, a written opinion, in form and substance reasonably satisfactory to such Indemnitee, of Tax Counsel to the effect that the applicable circumstances or law has changed and that in light thereof, there is substantial authority for contesting such claim; provided, that in the case of a event that such Indemnitee is not required under this paragraph to contest that any Tax liability for which the Lessee is being pursued by an obligated to indemnify any Indemnitee, the aggregate amount Lessee may contest such Tax liability in the name of the claim (together with Lessee, if permitted by law. The Lessee may appeal or require the amount Indemnitee to appeal any judicial decision provided the foregoing requirements of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) 8.04 are met and the Indemnitee shall have received, at the Lessee's expense, an opinion of Tax Counsel, to the effect that there is at least $3,000substantial authority for such appeal. Notwithstanding the foregoing, if Nothing contained in this Section 8.04 shall require any Indemnitee shall releaseto contest or continue to contest, waiveor permit Lessee to contest, compromise or settle any a claim which may such Indemnitee would otherwise be indemnifiable by Lessee required to contest pursuant to this Section 6(b) without the written permission of Lessee8.04, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), if such Indemnitee shall repay to waive payment by Lessee of any amount previously paid or advanced to such Indemnitee that might otherwise be payable by Lessee under this Article 8 in connection with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 1 contract
Sources: Participation Agreement (Atlantic Coast Airlines Inc)
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such against a Tax Indemnitee for any Taxes with respect to which the Lessee may be required to indemnify hereunderagainst hereunder (a "Tax Claim"), such Tax Indemnitee shall give the Lessee written notice of such Tax Claim promptly (but in any event within twenty (20) days) after its receipt, and shall furnish Lessee with copies of such Tax Claim and all other writings received from the taxing authority to the extent relating to such claim (but failure to so notify the Lessee shall relieve the Lessee of its obligations hereunder only to the extent it effectively precludes a contest of the claim). The Tax Indemnitee shall not pay such Tax Claim until at least thirty (30) days after providing the Lessee with such written notice, unless (a) the Tax Indemnitee is required to do so by law or regulation and (b) in the written notice described above, the Tax Indemnitee has notified the Lessee of such requirement. If requested by the Lessee in writing shall so request within 30 days after its receipt of such notice, then such Tax Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), shall in good faith at Lessee's expense contest (orsuch Tax; provided, if permitted by applicable lawhowever, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue contest involves only Taxes constituting property taxes, sales taxes, or issues from use taxes and does not involve any taxes or other issues arising in the same administrative or judicial proceeding that relating to a Tax Indemnitee which are unrelated to the transactions contemplated by the Operative Documents withoutAgreements and if no Equity Insufficiency Circumstance exists, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve be undertaken by the payment of Lessee at the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties Lessee's expense and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interestat no-free basis and with no additional net after-tax cost to the Lessor or the Owner Participant, but if such contest would involve any other type of Tax or any taxes or issues relating to a Tax Indemnitee which are unrelated to the transactions contemplated by Operative Agreements or if an Equity Insufficiency exists, then such Tax Indemnitee may, in its sole discretion, control such contest (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that including selecting the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security forum for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, and determining whether any such contest shall be conducted by (i) paying such Tax under protest or (ii) resisting payment of such Tax or (iii) paying such Tax and seeking a refund thereof; provided, further, however, that at such Tax Indemnitee's option, such contest shall be conducted by the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) Lessee in the case name of a such Tax Indemnitee). In no event shall such Tax Indemnitee be required or the Lessee be permitted to contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit Tax for which the Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee obligated to indemnify pursuant to this Section 6(bunless: (i) without the written permission Lessee shall have acknowledged in writing its liability to such Tax Indemnitee for an indemnity payment pursuant to this Section as a result of such claim if and to the extent such Tax Indemnitee or the Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on as the outcome case may be, shall not prevail in the contest of such claim) ; provided, however, that the Lessee shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to indemnify for such Taxes to the extent the results of the contest clearly and unambiguously demonstrate that the imposition Tax is not an indemnified Tax; (ii) such Tax Indemnitee shall have received the opinion of any independent tax counsel selected by the Tax Indemnitee and shall be permitted reasonably satisfactory to settle or compromise any claim without the Lessee furnished at the Lessee's consent if sole expense, to the effect that a reasonable basis exists for contesting such Indemnitee (A) shall waive its right to indemnity under this Section 6(b)claim or, in the event of an appeal of a court decision, that it is more likely than not that an appellate court or an administrative agency with respect to such Tax (and any directly related claim and any claim appellate jurisdiction, as the outcome of which is determined based upon case may be, will reverse or substantially modify the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.adverse determination;
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 26.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 26.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within 30 days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 26.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), such if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) this sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien or Lessor Lien) on the Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on within ten (10) Business Days after demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv26.5(b)) is at least exceeds $3,000. Notwithstanding the foregoing500,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement, provided, however, that if the Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releaseat the Lessee's expense supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waive, suit or proceeding to the extent permitted by this Section 26.5(b). No Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b26.5 (and with respect to which contest is required under this Section 26.5(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 26.5 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 26.5 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 1 contract
Contests. If a written claim is made against In respect of the indemnification provided under Section 11.1(a), promptly after receipt by an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written of notice of such proceeding) for Taxes as to which Lessee could be liable for payment any pending or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunderthreatened Claim, such Indemnitee shall promptly shall, if a claim for indemnification in respect thereof is to be made against Lessee give Lessee written notice in writing of such claim (provided, however, thereof to Lessee; provided that the failure to provide such prompt notice shall not affect limit Lessee's obligations hereunder to the Owner Participant unless or prejudice any rights of such failure shall materially adversely affect the right to contest such claimIndemnitee under Section 11.1(a) and shall not take any action with respect to such claim or Tax without Claim, except to the consent extent that such failure to provide prompt notice adversely affects Lessee's indemnification obligations hereunder. So long as no Lease Event of Default is continuing, Lessee for at its own expense, may elect to assume the defense of any such Claim through its own counsel, which shall be subject to the reasonable approval of the Indemnitee, on behalf of the Indemnitee (with full right of subrogation to the Indemnitee's rights and defenses). Lessee must indicate its election to assume such defense by written notice to the Indemnitee within 30 days following the receipt of Indemnitee's notice of the Claim, or in the case of a third party claim which requires a shorter time for response then within such shorter period as specified in the Indemnitee's notice by Lesseeof Claim; provided, however, that, if provided that such Indemnitee shall be required by law has given Lessee notice thereof. If Lessee denies liability or fails to take action prior respond to the end of such 30-day periodnotice within the time period set forth above, such the Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long may defend or compromise the Claim as it is legally able deems appropriate without prejudice to do so (it being understood that an Indemnitee shall be entitled any of Indemnitee's rights hereunder and with no further obligation to pay inform Lessee of the Tax claimed status of the Claim and ▇▇▇ for a refund prior no right of Lessee to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest approve or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act disapprove any actions taken in connection with paying therewith by the Tax in the manner that is the least prejudicial to the pursuit of the contest)Indemnitee. In addition, such Indemnitee shall (provided that If Lessee shall have agreed elected to keep assume the defense of any such information confidential other than to Claim, then upon the extent necessary in order to contest request of Lessee, the claimIndemnitee requesting payment of indemnity under Section 11.1(a) shall promptly furnish Lessee with copies of any requests for information from records or documents pertaining to the matter to be indemnified and, to the extent known by such Indemnitee, a reasonably detailed explanation of the circumstances giving rise to the claim of indemnification and the determination of the amount of the requested indemnity payment. Upon payment in full to Indemnitee of any taxing authority relating indemnity pursuant to Section 11.1(a), Lessee shall be subrogated to any right of Indemnitee in respect of the matter against which such Taxes with respect to which Lessee may be required to indemnify hereunderindemnity has been paid. If requested by Lessee in writing within 30 days after its receipt shall have elected to assume the defense of any such noticeClaim, such upon the written request at any time and from time to time of Lessee, Indemnitee shall, at the expense of Lessee, take such reasonable actions and execute such documents as are necessary or reasonably appropriate to assist Lessee (including all reasonable out-of-pocket costs in the preservation and reasonable attorney enforcement against third parties of Lessee's right of subrogation hereunder. The Indemnitee may employ separate counsel in any such Claim and accountants fees)participate in the defense thereof, in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative but the fees and judicial proceedings the validity, applicability or amount expenses of such Taxes by (X) resisting payment thereof, (Y) not paying counsel shall be at the same except under protest if protest is necessary and proper or (Z) if expense of the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, Indemnitee unless the Indemnitee shall appeal any adverse administrative or judicial decision, except have been advised by its counsel that a conflict of interest exists in Lessee's counsel's representations of the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents withoutLessee, in which case the good faith judgment fees and expenses of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee 's counsel shall permit Lessee to control be for the conduct account of any such proceeding Lessee. All fees and expenses shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) periodically as incurred. So long as no Lease Event of Default shall have occurred and be continuing at the time the contest is begun continuing, Lessee shall not be liable for any LSI Logic Corporation Lease B settlement of any such Claim effected without its consent unless Lessee has provided security for its obligations hereunder by advancing shall fail to, or elect in writing not to, assume the defense thereof in which case the Indemnitee, without waiving any rights to indemnification hereunder, may defend such Indemnitee before proceeding with such contestClaim and enter into any good faith settlement thereof without the prior written consent of Lessee. Lessee shall not, without the amount prior written consent (not to be unreasonably withheld) of the Tax being contestedIndemnitee, plus effect any interest settlement of any such Claim unless such settlement includes an unconditional release of the Indemnitee from all liabilities that are the subject of such Claim. The parties agree to cooperate in any defense or settlement of any such Claim and penalties and an amount estimated in good faith by such Indemnitee for to give each other reasonable expenses, and (E) access to all information relevant thereto subject to appropriate confidentiality agreements. The parties will similarly cooperate in the case prosecution of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee or lawsuit against any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxthird party.
Appears in 1 contract
Contests. (a) Control. If requested by a written claim Tax Exempt New Common Facilities Owner in writing, within 30 days of receipt of the notice described in Section 3.1 hereof, the Tax Indemnitee, if permitted by applicable Law either (i) in the case of any Tax that may be procedurally segregated and contested independently from any Tax that is made against not subject to indemnification by such Tax Exempt New Common Facilities Owner, unless an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice adverse determination of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereundercontest would, or if an Indemnitee makes a determination that a in such Tax is due for which Lessee could Indemnitee’s good faith judgment, have an indemnity obligation hereunderadverse effect on such Tax Indemnitee’s tax liability arising out of transactions unrelated to this transaction, shall permit such Indemnitee shall promptly give Lessee notice Tax Exempt New Common Facilities Owner to contest (such contest to be conducted in writing the name of such claim (providedTax Exempt New Common Facilities Owner, howeverif permitted by Law, that or, otherwise, in the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt name of such notice by Lessee; Tax Indemnitee, provided, however, that, if such Tax Indemnitee determines at any time, in its sole discretion, that permitting such Tax Exempt New Common Facilities Owner to conduct or continue to conduct such contest is reasonably likely to have adverse business or other consequences to such Tax Indemnitee, such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice have the right to contest control (or reassert control over) such contest) or (IIii) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial case of a Tax which cannot be procedurally segregated and contested independently from Taxes not subject to the pursuit of the contest). In additionindemnification by such Tax Exempt New Common Facilities Owner, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to itself, contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee such Tax Exempt New Common Facilities Owner (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), or shall request such Tax Exempt New Common Facilities Owner to contest) in good faith contest (orincluding, if permitted without limitation, by applicable lawpursuit of judicial appeals and administrative procedures), allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (XA) resisting payment thereof, (YB) not paying the same except under protest if protest is shall be necessary and proper or (ZC) if the payment is shall be made, using reasonable efforts to obtain seeking a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lesseeproceedings; provided, the Indemnitee shall appeal any adverse administrative or judicial decisionhowever, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee such contest be required or permitted or continued unless:
(1) the amount at issue (taking into account all similar and logically related issues) exceeds $50,000;
(2) prior to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee taking such action, such Tax Exempt New Common Facilities Owner shall have agreed in writing to pay such Indemnitee Tax Indemnitee, and shall pay on demand demand, all reasonable out-of-pocket costs and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall incur in connection with contesting such claimclaim (including, without limitation, all legal, investigatory and accounting fees and disbursements);
(B3) in the good faith judgment of such Tax Indemnitee, the action to be taken will not result in any danger of sale, forfeiture or loss of its Composite Component Ownership Interest, the New Common Facilities or any part or interest therein or the creation of any Lien (except for Permitted Encumbrances) on the Composite Component Ownership Interest, the New Common Facilities or any part or interest therein;
(4) with respect to the action to be taken, there is no risk of criminal liability or criminal penalties or fines that may be imposed with respect to such Tax Indemnitee;
(5) if such contest shall involve is to be initiated by the payment of, and the claiming of the claima refund for, Lessee such Taxes, such Tax Exempt New Common Facilities Owner shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax Tax with respect thereto that are required to be paid prior to the commencement of such contest Tax Indemnitee on an interest-free basis and with no additional net after-tax cost to such Tax Indemnitee (to make such payment and shall indemnify such Tax Indemnitee shall promptly pay in form and substance satisfactory to Lessee such Tax Indemnitee against any net realized adverse tax benefits resulting from any imputed interest deduction consequences arising from such interest free advance from Lessee plus any advance;
(6) independent tax benefits resulting from making any counsel selected by such payment), (C) Tax Exempt New Common Facilities Owner and reasonably acceptable to such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft furnished such Tax Indemnitee (unless Lessee waived in writing by such Tax Indemnitee) with an opinion prepared at such Tax Exempt New Common Facilities Owner’s expense, to the effect that there is a reasonable basis under Code Section 6662 and the Treasury Regulations thereunder to contest such claim);
(7) such Tax Exempt New Common Facilities Owner shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for acknowledged in writing its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Tax Indemnitee with in respect to such claim (and all directly related claims and claims based on the outcome of such claim) contested Tax in the event such contest is unsuccessful; provided, that such Tax Exempt New Common Facilities Owner shall terminate, subject not be bound by such acknowledgment if and to this Section 6(b)(iv), and subject to Section 6(b)(iii), the extent that there is a final resolution of the contest from which it can be established that such Indemnitee shall repay to Lessee any amount previously paid or advanced to Tax Exempt New Common Facilities Owner would not be liable for such Indemnitee with respect to such claim, plus interest at Tax in the rate that would have been payable by the relevant taxing authority with respect to a refund absence of such Tax. Notwithstanding anything contained acknowledgment; and
(8) in this Section 6(b)no event shall a Tax Indemnitee be required, or a Tax Exempt New Common Facilities Owner be permitted, to appeal an Indemnitee will not be required adverse judicial determination to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxUnited States Supreme Court.
Appears in 1 contract
Contests. (a) Nothing in this Agreement shall be construed to prevent UpREIT from contesting, through its Tax Matters Partner in accordance with the Partnership Agreement as part of the unified audit of the UpREIT, any claim in respect of any "partnership" item of the UpREIT that, if successful, would result in an Income Inclusion (a "Partnership Level Issue").
(b) If UpREIT contests a written claim is made against Partnership Level Issue that, if successful, would result in an Indemnitee or if any proceeding is commenced against an Indemnitee Income Inclusion, UpREIT's liability for indemnification under Section 4 hereof (including other than reasonable costs and expenses described in Section 6(f) of the Agreement) shall, at UpREIT's election, be deferred until thirty (30) days after a written notice Final Determination of such proceeding▇▇▇▇▇ Indemnitee's federal income tax liability in respect of an Income Inclusion.
(c) for Taxes If any audit or proceeding involving an indemnifiable adjustment is being conducted in a proceeding involving such ▇▇▇▇▇ Indemnitee, which cannot be transferred to the UpREIT as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that partnership item (a Tax is due for which Lessee could have an indemnity obligation hereunder"▇▇▇▇▇ Level Issue"), such ▇▇▇▇▇ Indemnitee shall hereby agrees (i) promptly give Lessee notice to notify UpREIT in writing of such claim adjustment (and the failure of such ▇▇▇▇▇ Indemnitee to so notify UpREIT shall preclude any indemnity hereunder to the extent UpREIT's right to effect its contest rights hereunder has been precluded by such failure), and (ii) upon UpREIT's delivery to of a written opinion of nationally recognized tax counsel reasonably acceptable to such ▇▇▇▇▇ Indemnitee ("Tax Counsel") to the effect that there is a Realistic Possibility of Success upon contest of such ▇▇▇▇▇ Level Issue, such ▇▇▇▇▇ Indemnitee will contest that adjustment by filing a protest and administrative appeal and prosecuting the same in good faith; provided, however, that such ▇▇▇▇▇ Indemnitee will not be obligated to pursue an administrative appeal if such ▇▇▇▇▇ Indemnitee instead pursues relief in Tax Court or a court having refund jurisdiction.
(d) If, within 30 days following the failure of such administrative proceedings with respect to provide a ▇▇▇▇▇ Level Issue, UpREIT delivers to a ▇▇▇▇▇ Indemnitee a written opinion of Tax Counsel to the effect that there is a Realistic Possibility of Success if the proposed adjustment is presented to a court for resolution, then such notice ▇▇▇▇▇ Indemnitee will contest the proposed adjustment in good faith in the Tax Court or by paying the tax (and any applicable interest and penalties) and suing for refund in the Court of Federal Claims or appropriate Federal District Court. If, within 30 days following a final adverse decision of such court with respect to such ▇▇▇▇▇ Level Issue, UpREIT delivers to such ▇▇▇▇▇ Indemnitee a written opinion of Tax Counsel to the effect that it is more likely than not that such decision would be reversed on appeal, then such ▇▇▇▇▇ Indemnitee will appeal such decision to the appropriate Federal Court of Appeals. With respect to any of the above-described proceedings, such ▇▇▇▇▇ Indemnitee will keep UpREIT and its counsel informed as to the progress of such proceedings, give UpREIT and its counsel the opportunity to review and comment in advance on all written submissions and filings relevant to indemnifiable issues (after making appropriate redactions to preserve the confidentiality of the such ▇▇▇▇▇ Indemnitee return as to other issues), and consider in good faith any suggestions made by UpREIT or its counsel.
(e) Such ▇▇▇▇▇ Indemnitee shall present any settlement offer provided to such ▇▇▇▇▇ Indemnitee pursuant to a ▇▇▇▇▇ Level Issue to UpREIT. If UpREIT recommends acceptance of a settlement offer of a ▇▇▇▇▇ Level Issue or if the Tax Matters Partner recommends acceptance of a settlement offer in respect of a Partnership Level Issue, but such ▇▇▇▇▇ Indemnitee declines to accept such offer in writing within 30 days (if such ▇▇▇▇▇ Indemnitee does not respond within 30 days, such lack of response shall be treated as acceptance of UpREIT's or the Tax Matters Partner's recommendation, respectively), (1) the obligation of UpREIT to make indemnity payments as the result of any such contest or proceedings shall not affect Lessee's obligations hereunder to thereafter exceed the Owner Participant unless obligation that it would have had if such failure contest had been settled or proceeding terminated on the basis recommended by UpREIT or the Tax Matters Partner, as applicable, and (2) in the case of a ▇▇▇▇▇ Level Issue, UpREIT shall materially adversely affect have no further liability for costs or other expenses in respect of such contest.
(f) Notwithstanding the right foregoing, such ▇▇▇▇▇ Indemnitee will have no obligation to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and a ▇▇▇▇▇ for Level Issue (i) unless such items could give rise to a refund prior to the end of such 30-day period if federal income tax liability (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax disregarding other items in the manner that is the least prejudicial to the pursuit assessment and considering effects in future years) in excess of the contest). In addition$__________ , such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimii) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticewithout UpREIT paying when due, such Indemnitee shall, at the expense of Lessee (including all reasonable third-party costs and out-of-pocket expenses including reasonable legal, witness and accounting fees and other expenses and, in the case of proceedings before the Court of Federal Claims or Federal District Court, the amount of tax (and any applicable interest and penalties) for which refund is claimed, and (iii) to the extent such ▇▇▇▇▇ Indemnitee waives in writing UpREIT's obligation to indemnify such ▇▇▇▇▇ Indemnitee for such items, in which case all third-party costs and reasonable attorney out-of-pocket expenses described in clause (ii) thereafter incurred and accountants fees), in good faith contest all taxes would be paid by such ▇▇▇▇▇ Indemnitee.
(or, if permitted by applicable law, allow Lessee to contestg) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the ▇▇▇▇▇ Indemnitee shall appeal not settle any adverse administrative or judicial decision, except such ▇▇▇▇▇ Level Issue without UpREIT's consent; provided that the such ▇▇▇▇▇ Indemnitee shall not be required to pursue contest any appeals to the United States Supreme Court. If proposed adjustment and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of may settle any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) proposed adjustment if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such ▇▇▇▇▇ Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), Agreement with respect to such Tax adjustment and any Income Inclusion that results from such adjustment and, in the case of proceedings before the Court of Federal Claims or Federal District Court, shall pay to UpREIT the amount of tax (and any directly related claim applicable interest and any claim the outcome of which is determined based upon the outcome of such claimpenalties) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) UpREIT with respect to such Taxadjustment or the contest of such adjustment under Section 6(f), plus interest at ___% computed from the rate that would have been payable time such amounts were paid or advanced by UpREIT.
(h) Within thirty (30) days after a Final Determination of the liability of such ▇▇▇▇▇ Indemnitee in respect of a ▇▇▇▇▇ Level Issue, UpREIT and each Indemnitee agree to pay each other, as applicable, the net amount of (i) the payment owed by the relevant taxing authority UpREIT to such ▇▇▇▇▇ Indemnitee of any indemnification hereunder, not theretofore paid resulting from the outcome of such contest, and (ii) in the case of proceedings before the Court of Federal Claims or Federal District Court, the repayment owed by such ▇▇▇▇▇ Indemnitee to UpREIT of the amount of tax (and any applicable interest and penalties) previously paid or advanced by UpREIT with respect to a refund such adjustment or the contest of such Taxadjustment under Section 6(f), together with any interest received by or credited to such ▇▇▇▇▇ Indemnitee that is attributable to such advance.
Appears in 1 contract
Sources: Tax Indemnification Agreement (Prime Group Realty Trust)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could the Representative may have an indemnity obligation hereunderpursuant to this Section 13.5, or if any Tax Indemnitee shall determine that any Imposition to which the Representative may have an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax Indemnitee shall promptly give Lessee notice (and in any event, within 30 days) notify the Representative in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Representative within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any Impositions) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of Lessee the Representative (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by Lesseethe Representative; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to Lesseethe Representative, so inform Lessee, the Representative and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Representative (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Representative unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period. The Representative shall be entitled for a period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such notice, notice from such Tax Indemnitee shall, at (or such shorter period as such Tax Indemnitee has notified the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants feesis required by law or regulation for such Tax Indemnitee to commence such contest), to request in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees writing that such Tax Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by Representative's expense. If (x) such contest can be pursued in the relevant taxing authority with respect to name of the Representative and independently from any other proceeding involving a refund of such Tax.
Appears in 1 contract
Sources: Participation Agreement (Beverly Enterprises Inc /De/)
Contests. If Notwithstanding anything to the contrary contained in this Agreement:
(a) After the Closing Date, Purchaser shall notify Seller in writing within ten (10) days of the date a written claim is made against an Indemnitee or threatened in writing by any Taxing Authority that, if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereundersuccessful, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have may reasonably result in an indemnity obligation hereunder, such Indemnitee payment by Seller under Section 10.4 (a "Tax Claim"). Such notice shall promptly give Lessee notice contain factual information describing in writing reasonable detail the nature and basis of such claim (and the amount thereof, to the extent known, and shall include copies of any notice or other document received from any Taxing Authority in respect of any such asserted Tax liability. Failure by Purchaser to give such notice to the Seller shall not relieve the Seller of any liability that it may have on account of its indemnification obligation under this Article X, except to the extent that the Seller is materially and adversely prejudiced thereby in the defense of such Tax Claim; provided, however, that irrespective of whether the Seller is materially or adversely prejudiced, Seller shall be permitted to reduce any liability it may have on account of its indemnification obligation under this Article X by the amount of Seller's actual, out-of-pocket monetary damages that are caused by the Purchaser's failure to timely give the notice required pursuant to this Section 10.7(a).
(b) Seller will have the right, at its option, upon timely notice to Purchaser, to assume at its own expense control of any audit or other defense of any Tax Claim (other than a Tax Claim relating solely to Taxes of RSUI for a Straddle Period, which as described below, the parties shall jointly control) with its own counsel, provided that Seller's notice acknowledges Seller's indemnification liability for such claim. Seller's right to control a Tax Claim will be limited to issues in respect of which amounts in dispute would be paid by Seller or for which Seller would be liable pursuant to Section 10.4. Costs of defending or contesting such Tax Claims are to be borne by Seller unless the Tax Claim relates to a Straddle Period, in which event such costs shall be fairly apportioned as described below. Purchaser and RSUI at their own expense each shall cooperate with Seller in contesting any Tax Claim, which cooperation shall include the retention and, upon Seller's request, the provision of records and information that are reasonably relevant to such Tax Claim and making employees available on a mutually convenient basis to provide such notice additional information or explanation of any material provided hereunder. Notwithstanding the foregoing, Seller shall not affect Lessee's obligations hereunder neither consent nor agree to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take settlement of any action Tax Claim with respect to such claim any liability for Taxes that may affect the liability for any state, federal or foreign income tax of RSUI or any affiliated group (as defined in section 1504(a) of the Code) of which RSUI is a member for any Post-Closing Tax Period without the prior written consent of Lessee for 30 days following the receipt of such notice by Lessee; providedPurchaser, howeverwhich consent shall not be unreasonably withheld, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lesseeconditioned or delayed, and such Indemnitee neither Seller, nor any Affiliate of Seller, shall take no action file an amended Tax Return that may increase the liability for as long as it is legally able to do so (it being understood that an Indemnitee Taxes of RSUI for any Post-Closing Tax Period without the prior written consent of Purchaser, which consent shall not be entitled to pay the Tax claimed unreasonably withheld, conditioned or delayed. Purchaser and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee Seller shall act jointly control all proceedings taken in connection with paying the any Tax in the manner that is the least prejudicial Claims relating solely to the pursuit a Straddle Period of the contest). In addition, such Indemnitee RSUI and each party shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after bear its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable own out-of-pocket costs and reasonable attorney expenses of the contest and accountants fees), in good faith all joint costs and expenses of the contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising borne in the same administrative ratio as the applicable proposed Tax would be allocated. For purposes of this Section 10.7(b), when applying the definitions of "Pre-Closing Tax Period," "Post-Closing Tax Period," "Straddle Period," or judicial proceeding that are unrelated "Closing Date," (i) with reference to Tax Claims involving federal Income Taxes, the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is term "Closing Date" as used in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee definitions shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required deemed to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expensesClosing Date, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(bii) with respect to Tax Claims involving all other Taxes, the term "Closing Date" as used in such Taxdefinitions shall be deemed to be June 30, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax2003.
Appears in 1 contract
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a a) Buyer agrees to give written notice to Seller of such proceeding) for Taxes as to the receipt of any written notice by the Company, Buyer or any of Buyer’s Affiliates which Lessee could be liable for payment or indemnity hereunderinvolves the assertion of any claim, or if an Indemnitee makes a determination that a Tax is due for the commencement of any Action, in respect of which Lessee could have an indemnity obligation hereundermay be sought by Buyer pursuant to this ARTICLE VI (a “Tax Claim”); provided, such Indemnitee that failure to comply with this provision shall promptly give Lessee notice not affect Buyer’s right to indemnification hereunder except to the extent Seller was actually and materially prejudiced as a result thereof.
(b) Seller shall control the contest or resolution of any Tax Claim relating to a Pre-Closing Tax Period (other than any Pre-Closing Tax Period included in writing of such claim (a Straddle Period); provided, however, that (i) Seller shall keep Buyer reasonably informed of the failure to provide progress of any such notice Tax Claim, (ii) Buyer shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect have the right to contest participate in the defense of any such claimTax Claim at Buyer’s sole cost and expense, and (iii) and solely with respect to a Tax Claim that would adversely affect Buyer in a Post-Closing Tax Period, Seller shall obtain the prior written consent of Buyer (which consent shall not take be unreasonably withheld, conditioned or delayed) before entering into any action settlement of such Tax Claim or ceasing to defend such Tax Claim; provided however, that if Seller determines that such Tax Claim would not adversely affect Buyer in a Post-Closing Tax Period and therefore does not require Seller to obtain Buyer's prior written consent pursuant to this clause (iii), Seller shall provide written confirmation to Buyer of Seller's obligation pursuant to Section 6.03 to indemnify Buyer with respect to such claim or Tax without the consent Claim within ten (10) days of Lessee for 30 days following the receipt entering into any settlement of such notice by LesseeTax Claim or ceasing to defend such Tax Claim. If Seller fails to, or does not elect to, timely exercise control over the conduct with respect to any such Tax Claim, Buyer shall have control over the conduct with respect to such Tax Claim; provided, however, thatthat Seller shall have the right, if such Indemnitee shall be required by law but not the obligation, to take action prior to the end of such 30-day period, such Indemnitee shall, participate in such notice to Lessee, so inform Lessee, defense with separate counsel of its choosing at its sole cost and such Indemnitee expense. Buyer shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee Seller (except as contemplated by this Section 6(b)(iv)). Notwithstanding which consent shall not be unreasonably withheld, conditioned or delayed) before entering into any settlement of such Tax Claim or ceasing to defend such Tax Claim.
(c) Buyer shall control the foregoingcontest or resolution of any Tax Claim relating to a Straddle Period; provided, in no event however, that (i) Buyer shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment keep Seller reasonably informed of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests progress of any such Indemnitee)Tax Claim, (Dii) no Lease Event of Default Seller shall have occurred the right to participate in the defense of any such Tax Claim at Seller’s sole cost and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expensesexpense, and (Eiii) in Buyer shall obtain the case prior written consent of a contest that is being pursued by an IndemniteeSeller (which consent shall not be unreasonably withheld, the aggregate amount of the claim (together with the amount of all similar conditioned or logically related claims that have been or could be raised with delayed) before entering into any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome settlement of such claim) shall terminate, subject Tax Claim or ceasing to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to defend such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxClaim.
Appears in 1 contract
Sources: Stock Purchase Agreement (BurgerFi International, Inc.)
Contests. Lessee shall pay on or before the time or times prescribed by law any Taxes that Lessee is liable for hereunder. If a written any claim or claims is or are made against an any Indemnitee or if for any proceeding Tax which is commenced against an subject to indemnification as provided in Section 7.2(a), Indemnitee (including a shall as soon as practicable, but in no event more than 30 days after receipt of formal written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to or proposed Tax, notify the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its of Lessee's receipt of such noticenotice from the Indemnitee, such Indemnitee shallshall contest (including all judicial appeals other than to the United States Supreme Court), at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)Lessee, in good faith contest the name of such Indemnitee (oror such Indemnitee, in its sole discretion, may require Lessee, if permitted by applicable lawApplicable Laws and Regulations, allow to contest in the name of Lessee to contestor such Indemnitee) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by Tax; provided that such contest shall be required only if (Xi) resisting payment thereofin the reasonable opinion of Lessee and its tax counsel reasonably acceptable to such Indemnitee, there exists a reasonable basis, within the meaning of ABA Formal Opinion No. 85-352, to contest such Tax, (Yii) no Lease Event of Default has occurred and is continuing, (iii) Lessee has acknowledged in writing its liability for the Tax at issue to the extent the contest is not successful, (iv) the contest will not result in a risk of criminal liability of an Indemnitee or a material risk of sale, loss or forfeiture of the Aircraft or any part thereof or interest therein, (v) the amount of the Tax exceeds $25,000, and (vi) Lessee pays all reasonable expenses incurred by the Indemnitee in contesting any such Tax (including, without limitation, all reasonable attorneys' and accountants' fees), upon demand by the Indemnitee. Lessee shall have the right to participate in the conduct of any proceedings controlled by the Indemnitee to the extent that such participation by such Person does not interfere with the Indemnitee's control of such contest and Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitee shall have the right to participate in the conduct of any proceedings controlled by Lessee to the extent that such participation by such Person does not interfere with Lessee's control of such contest, and the Indemnitee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim for which Lessee would be required to make a reimbursement payment hereunder will not be settled or compromised without Lessee's good faith prior written consent unless the Indemnitee waives its right to indemnification hereunder and repays the Taxes advanced by Lessee as a non-interest bearing loan by Lessee to such Indemnitee (as provided below) with interest at the Overdue Rate from the date of payment until receipt thereof by Lessee. Indemnitee shall endeavor to settle or compromise any such contested claim in accordance with written instructions received from the Lessee; provided, that (x) Lessee on or before the date the Indemnitee executes a settlement or compromise pays the contested Tax to the extent agreed upon or makes an indemnification payment to the Indemnitee in an amount acceptable to the Indemnitee; and (y) the settlement or compromise does not, in the reasonable opinion of the Indemnitee, adversely affect the right of the Certificate Trustee or such Indemnitee to receive Rent or the Lease Balance or any other payment pursuant to the Operative Documents, or involve a material risk of sale, forfeiture or loss of any Aircraft or any interest therein. The failure of an Indemnitee to contest timely a claim against it for any Tax which is subject to indemnification under Section 7.2(a) and for which it has an obligation to Lessee to contest under this Section 7.2(b) in the manner required by Applicable Laws and Regulations where Lessee has timely requested that such Indemnitee contest such claim shall relieve Lessee of its obligations to such Indemnitee under Section 7.2(a) with respect to such claim only to the extent such failure results in the loss of an effective contest. If Applicable Laws and Regulations require the payment of a contested Tax as a condition to, or regardless of, its being contested (or if the Indemnitee controls such contest and decides to pursue such contest by paying the same except under protest if protest is necessary Tax and proper or (Z) if the payment is made, using reasonable efforts to obtain seeking a refund thereof thereof), and Lessee chooses to contest such Tax or to direct the Indemnitee to contest such Tax in accordance with this Section, then Lessee shall provide the Indemnitee with the funds to pay such Tax, such provision of funds to be deemed a non-interest bearing loan by Lessee to the Indemnitee to be repaid by any recovery of such Tax from such contest and remaining unpaid amount not recovered to offset Lessee's obligation to indemnify the Indemnitee for such Tax. Lessee shall indemnify the Indemnitee on an appropriate administrative and/or judicial proceedingAfter-Tax Basis in accordance with Section 7.7 for and against any adverse consequences of any such interest-free loan. If requested to do so In the event that the Indemnitee receives a refund (or like adjustment) in respect of any Tax for which the Indemnitee has been reimbursed by Lessee, the Indemnitee shall appeal promptly remit the amount of such refund (or like adjustment), plus any adverse administrative or judicial decisioninterest received thereon, except to Lessee, net of all reasonable costs and expenses incurred by such Indemnitee in connection therewith; provided, however, that the Indemnitee shall not be required to pursue remit any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without sentence in excess of the written permission of Lesseeamounts previously paid by Lessee to, Lessee's obligation to indemnify or on behalf of, such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject Tax pursuant to this Section 6(b)(iv)7, and subject to Section 6(b)(iii)plus any interest received thereon; provided, such further, that Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee remit any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to sentence for so long as a refund Lease Event of such TaxDefault has occurred and is continuing.
Appears in 1 contract
Contests. If a written claim is made against an Indemnitee or if (a) After the Closing, the Purchaser shall promptly notify the Sellers’ Representative in writing of any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) a proposed assessment or claim in an audit or administrative or judicial proceeding of the Purchaser or any Company or Subsidiary which, if determined adversely to the taxpayer, would be grounds for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (indemnification under this Article VI; provided, however, that the failure to provide give such notice shall will not affect Lessee's obligations hereunder the Purchaser’s right to indemnification under this Article VI except to the Owner Participant unless extent, if any, that, but for such failure failure, the Sellers could have avoided all or a portion of the Tax liability in question.
(b) In the case of an audit or administrative or judicial proceeding that relates to taxable periods ending on or before the Closing Date, provided that, and only to the extent that, the Sellers acknowledge in writing their liability under this Agreement to hold the Purchaser, the Companies and the Subsidiaries harmless against the full amount of any adjustment which may be made as a result of such audit or proceeding, the Sellers’ Representative shall materially adversely affect have the right at his expense to contest participate in and control the conduct of such claim) audit or proceeding; the Purchaser also may participate in any such audit or proceeding at its own expense and, if the Sellers’ Representative does not assume the defense of any such audit or proceeding, the Purchaser may defend the same in such manner as it may deem appropriate, including settling such audit or proceeding after fifteen days prior written notice to the Sellers’ Representative setting forth the terms and conditions of settlement. Notwithstanding anything to the contrary contained in Section 7.05, in the event that issues relating to a potential adjustment for which the Sellers have acknowledged liability are required to be contested in the same audit or proceeding as separate issues relating to a potential adjustment for which the Purchaser would be liable, the Purchaser shall not take any action have the right, at its expense, to control the audit or proceeding with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lesseelatter issues; provided, however, that, if such Indemnitee that the Purchaser shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice have the right to contest or (II) settle any such matter without the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit consent of the contest). In additionSellers’ Representative, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee consent shall not be required to pursue any appeals unreasonably withheld.
(c) Notwithstanding anything to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contrary contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b)6.04, with respect to such Tax issues relating to a potential adjustment for which both the Sellers (as evidenced by their written acknowledgement under this Section 6.04) and the Purchaser or any Company or Subsidiary could be liable, (i) both the Sellers’ Representative and the Purchaser may participate in the audit or proceeding; (ii) the audit or proceeding shall be controlled by that party which would bear the burden of the greater portion of the sum of the adjustment and any directly related claim corresponding adjustments that may reasonably be anticipated for future taxable periods; and (iii) the controlling party shall not settle any such matter without the consent of the non-controlling party (which consent shall not be unreasonably withheld). The principle set forth in this Section 6.04(c) also shall govern for purposes of deciding any issue that must be decided jointly (including choice of judicial forum) in situations in which separate issues are otherwise controlled under this Article VI by the Purchaser and the Sellers’ Representative.
(d) With respect to any Tax audit or proceeding for a taxable period that begins before the Closing Date, neither the Purchaser nor the Sellers’ Representative shall enter into any compromise or agree to settle any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect such audit or proceeding which would adversely affect the other party for such taxable period or a subsequent taxable period without the written consent of the other party, which consent may not be unreasonably withheld. The Purchaser and the Sellers’ Representative agree to cooperate, and the Purchaser agrees to cause the Companies and the Subsidiaries to cooperate, in the defense against or compromise of any claim in any such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxaudit or proceeding.
Appears in 1 contract
Sources: Stock Purchase Agreement (Lincoln Educational Services Corp)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.4, or if any Tax Indemnitee shall determine that any Imposition for which the Lessee may have an indemnity obligation pursuant to this Section 13.4 may be payable, such Tax Indemnitee shall promptly give and in any event, within 30 days after a Responsible Officer of such Tax Indemnitee has actual knowledge thereof notify the Lessee notice in writing provided that failure to so notify the Lessee within 30 days after a Responsible Officer of such claim (provided, however, that the failure to provide such notice Tax Indemnitee has actual knowledge thereof shall not affect Lessee's obligations hereunder alter such Tax Indemnitee’s rights under this Section 13.4, except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee, unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information 60 days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, notice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee shall, at has notified the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants feesis required by law or regulation for the Tax Indemnitee to commence such contest), in good faith subject to the immediately following sentence, to assume control of such contest (oror if such contest is of a type that must be pursued, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents withoutat all, in the good faith judgment name of such Tax Indemnitee, adversely affecting require that such Tax Indemnitee pursue such contest. If (x) such contest can be pursued in the name of the Lessee and independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (y) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee or (z) the Tax Indemnitee so requests, then the Lessee shall permit Lessee be permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in any of clause (x), such (y) or (z) if the Tax Indemnitee shall consult with Lessee determines reasonably and in good faith regarding that such contest by the manner Lessee could have a material adverse effect on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of the preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel of its selection reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of independent counsel that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Subject Property, the CSC Sublease, any Fifth Floor Sublease or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing, unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) is responsible hereunder, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition, including all reasonable legal, accounting and investigatory fees and disbursements as well as the Impositions which are the subject of such claim to the extent the contest is unsuccessful, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs (including Taxes) to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such claims contested in the name of the Tax Indemnitee in a public forum, no contest by a Tax Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), be required: (C1) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.4(b)) is at least exceeds $3,000. Notwithstanding the foregoing50,000 and (2) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion from counsel or a tax accountancy firm selected by the Lessee and reasonably acceptable to the Tax Indemnitee confirming that a reasonable basis exists to contest such claim (or in the case of an appeal of an adverse determination, an opinion of such counsel to the effect that it is more likely than not that the determination may be reversed on appeal). In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund). In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releasesupply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waivesuit or proceeding to the extent permitted by this Section 13.4(b), and the Lessee shall promptly reimburse such Indemnitee for the reasonable out-of-pocket expenses of supplying such information and documents. Except during the occurrence of an Event of Default where Lessee shall have failed to provide indemnity and, if requested by an Indemnitee, collateral security, both in form, substance and in such amounts reasonably satisfactory to each Indemnitee, no Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.4 (and with respect to which contest is required under this Section 13.4(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.4 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if (i) such Tax Indemnitee shall waive its right to indemnification under this Section 13.4 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claimyear or any other taxable year, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claimwaiver) or (ii) such Tax is the sole result of a claim of a continuing and (B) shall pay to Lessee any amount consistent nature, which claim has previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by resolved against the relevant taxing authority with respect Tax Indemnitee (unless a change in law or facts has occurred since such prior adverse resolution and Lessee provides an opinion of independent tax counsel to the effect that it is more likely than not that such change in law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
Appears in 1 contract
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs costs, in-house attorney fees and reasonable outside attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest, but not if such contest involves issues unrelated to the transactions contemplated by the Operative Documents that cannot be severed from issues related to such indemnifiable Taxes by good faith diligent efforts) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by LesseeLessee in writing, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs costs, in-house attorney fees and reasonable outside attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-after- tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,00050,000 and (F) if requested prior to or during the contest by the Indemnitee, independent tax counsel selected by Lessee and reasonably acceptable to the Indemnitee, renders to the Indemnitee a written opinion that there is a reasonable basis (under the standard set forth in ABA Formal Opinion 85-352 or any successor thereto) for contesting such claim. Notwithstanding the foregoing, (X) Lessee shall not be permitted to contest in the name of the Indemnitee if such contest involves Taxes based on or measured by the gross or net income of the Indemnitee and, provided, that if the Indemnitee determines in good faith that it is reasonably likely that such contest may have a material adverse impact on the Indemnitee, such Indemnitee may retain or reassert control of any contest Lessee would otherwise be permitted to contest, and (Y) if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on any claim the outcome contest of such claimwhich is materially prejudiced as a result of the release, waiver, compromise or settlement) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 1 contract
Contests. (a) If an adjustment shall be proposed by the IRS in writing that, if sustained, would result in a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) Loss for Taxes as to which Lessee Old Dominion could be liable for payment or indemnity hereunderrequired to indemnify the Owner Participant under this Agreement, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall the Owner Participant agrees promptly give Lessee notice to notify Old Dominion in writing of such claim (providedproposed adjustment; PROVIDED, howeverHOWEVER, that the any failure to provide such notice shall not affect Lessee's obligations hereunder relieve Old Dominion of any obligation to indemnify the Owner Participant hereunder unless such failure shall precludes or materially adversely affect effects the right to initiation or continuation of the contest of such claimadjustment. If (i) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 within 90 days following the after receipt of such notice by Lessee; providedOld Dominion shall request in writing that the Owner Participant contest such proposed adjustment and (ii) the Owner Participant shall have received, howeverat the commencement of the contest and before each level of judicial proceeding, thatan opinion of Independent Tax Counsel, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shalleffect that there is a Reasonable Basis for contesting the proposed adjustment (and, in the case of an appeal from an adverse judicial determination, an opinion from such notice counsel to Lesseethe effect that there is a substantial possibility (which is a higher standard than Reasonable Basis, so inform Lesseealthough it is not necessarily more likely than not) that such adverse determination will be reversed or substantially modified upon appeal in a manner favorable to the taxpayer) (which opinions (a) will be furnished at Old Dominion's expense, and (b) the Owner Participant will assist in good faith and with diligence in promptly procuring), the Owner Participant shall contest such Indemnitee shall take no action for as long as it is legally able to do so (it being understood proposed adjustment; PROVIDED, HOWEVER, that an Indemnitee shall be entitled to the Owner Participant may, in its sole discretion, either pay the Tax claimed tax proposed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of proposed adjustment in any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticepermissible forum considering, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)however, in good faith contest (or, if permitted by applicable law, allow Lessee such requests as Old Dominion may make concerning the most appropriate forum in which to contest) through appropriate administrative and judicial proceedings proceed. Notwithstanding the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lesseeforegoing, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee Owner Participant shall not be required to pursue any appeals such contest unless (v) Old Dominion shall have agreed in writing to pay and shall pay on demand all reasonable costs and expenses that the United States Supreme Court. If Owner Participant shall incur in connection with contesting such proposed adjustment, including, without limitation, reasonable attorneys', accountants' and investigatory fees and disbursements; (w) the proposed adjustment that could result in a payment by Old Dominion (if a lump-sum amount were to be paid pursuant to Section 4(b)(2) hereof) in connection with such proposed adjustment, taking into account the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated amount of all similar and logically related adjustments with respect to the transactions contemplated by the Operative Documents without, that could be raised in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct an audit of any such proceeding other taxable year of the Owner Participant (including any future taxable year) not barred by the statute of limitations shall be at least $100,000 and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination at least $250,000 with respect to any claimjudicial appeal; (x) no Payment Default or settle or compromise any claim without the prior written consent Event of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee Default shall have agreed occurred and be continuing; and (y) if the Owner Participant shall determine to pay such Indemnitee on demand all reasonable out-of-pocket costs the tax proposed and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim▇▇▇ for a refund, (B) if such contest shall involve the payment of the claim, Lessee Old Dominion shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest Owner Participant on an interest-free basis and with no additional net after-tax cost to the Owner Participant sufficient funds to pay the tax and interest, penalties and additions to tax payable with respect thereto (to the extent such Indemnitee amount is indemnified against pursuant to Section 4 hereof (an "Advance")); and PROVIDED, HOWEVER, that the Owner Participant shall not be required to pursue any appeal to the United States Supreme Court.
(b) The Owner Participant also shall not be required to contest any proposed adjustment if the subject matter thereof shall be of a continuing nature and there shall have been a Final Determination with respect thereto, unless there shall have been a change in facts or law (including, without limitation, amendments to statutes or Treasury Regulations, administrative rulings and court decisions), and the Owner Participant shall have received an opinion of Independent Tax Counsel (which opinion (i) will be furnished at Old Dominion's expense, and (ii) the Owner Participant will assist in good faith and with diligence in promptly procuring) to the effect that as the result of such Indemnitee change in facts or law there is a substantial possibility (which is a higher standard than Reasonable Basis, although it is not necessarily more likely than not) that the Owner Participant will prevail in the contest of such proposed adjustment.
(c) In connection with any proposed adjustment described in Section 6(a) hereof, the Owner Participant shall promptly pay not make payment of such proposed adjustment for at least 30 days after the giving of written notice of such proposed adjustment to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making Old Dominion (except that if the Owner Participant shall be required by law or regulation to take action with respect to any such paymentadjustment prior to the end of such 30-day period, the Owner Participant shall, in such notice to Old Dominion, so inform Old Dominion, and the Owner Participant shall not take any action with respect to such adjustment without the consent of Old Dominion (not unreasonably to be withheld) before the date on which the Owner Participant shall be required to take action). Notwithstanding anything herein to the contrary, (C) such Indemnitee the Owner Participant shall have reasonably determined that full control over any contest pursuant to this Section 6 and shall determine in its sole discretion the action nature of all actions to be taken will not result in connection with any material risk of forfeiturecontest including the right to pursue or forego any administrative proceedings; PROVIDED, sale or loss of HOWEVER, that the Aircraft (unless Lessee Owner Participant shall have made provisions to protect the interests of any contest such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing claim at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing administrative level if such action shall be necessary to such Indemnitee before proceeding with such contestpreserve available judicial remedies; and PROVIDED, FURTHER, the amount of the Tax being contested, plus any interest and penalties and an amount estimated Owner Participant shall consult in good faith with Old Dominion and its counsel in the contest of any claim and shall keep such counsel reasonably informed regarding such contest. Nothing contained in this Section 6 shall require the Owner Participant to contest a proposed adjustment that it would otherwise be required to contest pursuant to this Section 6 if the Owner Participant (i) waives the payment by Old Dominion of any amount that might otherwise be payable by Old Dominion under this Agreement by way of indemnity in respect of such Indemnitee for reasonable expenses, proposed adjustment and (Eii) in the case of a contest that is being pursued by an Indemnitee, the aggregate pays to Old Dominion any amount of taxes, interest, penalties and additions to tax previously paid or advanced by Old Dominion pursuant to this Agreement with respect to such proposed adjustment, plus interest on such amounts at the claim IRS rate for refunds, payable from the date of payment by Old Dominion to the Owner Participant of such amounts to (together with but excluding) the amount date of all similar or logically related claims that have been or could be raised with any or all repayment of the other Aircraft leased such amounts by the Owner Participant to Lessee Old Dominion; PROVIDED, HOWEVER, that if the Owner Participant settles a proposed adjustment such that Old Dominion is precluded as a matter of law from initiating or raised in continuing a contest hereunder of any adjustment for any other audit for which Lessee would taxable period, the Owner Participant shall be deemed to have an indemnity obligation waived the payment by Old Dominion under this Section 6(b)(iv)Agreement of any indemnity amounts in respect of such other adjustment.
(d) is at least $3,000. Notwithstanding If Old Dominion shall have requested the foregoing, if any Indemnitee Owner Participant to contest a proposed adjustment as above provided and shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to have duly complied with all the terms of this Section 6(b6, Old Dominion's liability for indemnification due under Section 4 hereof shall, at Old Dominion's election (except for amounts provided for under Section 6(a) without hereof), be deferred until Final Determination of the written permission liability of Lesseethe Owner Participant. At such time, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on Old Dominion shall become obligated for the payment of any indemnification due under Section 4 hereof resulting from the outcome of such claim) contest. Upon payment in full by Old Dominion of any indemnity amounts due under this Agreement, the Owner Participant shall terminate, subject become obligated to this Section 6(b)(iv), and subject refund to Section 6(b)(iii), such Indemnitee shall repay Old Dominion an amount equal to Lessee any amount previously paid received as a refund of income taxes by the Owner Participant or advanced credited to such Indemnitee with respect to such claim, plus interest at the rate Owner Participant (including any refund or credit that would have been payable received but for a counterclaim or other claim not indemnified by the relevant taxing authority with respect Old Dominion hereunder) that is fairly attributable to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle advances or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity payments made by Old Dominion under this Section 6(b)Agreement, together with respect to such Tax any interest received (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable received) by the relevant taxing authority Owner Participant on such refund, plus an amount equal to any tax benefit realized by the Owner Participant as the result of the payment contemplated by this sentence. Such obligations of the Owner Participant and Old Dominion will first be set off against each other, and any difference owing by either party shall be paid within 30 days after such Final Determination but not prior to the date determined in accordance with respect to a refund of such TaxSection 4(b) hereof.
Appears in 1 contract
Sources: Tax Indemnity Agreement (Old Dominion Electric Cooperative)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 26.5, or if any Tax Indemnitee shall determine that any Imposition as to which the Lessee may have an indemnity obligation pursuant to this Section 26.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within 30 days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 26.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the Imposition, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), such if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of the preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Property or any part thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv26.5(b)) is at least exceeds $3,000. Notwithstanding the foregoing500,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement, provided, however, that if the Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releaseat the Lessee's expense supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waive, suit or proceeding to the extent permitted by this Section 26.5(b). No Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b26.5 (and with respect to which contest is required under this Section 26.5(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 26.5 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 26.5 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and waiver), unless the failure to contest such claim -55- 57 would, in the reasonable judgement of the Lessee, have an adverse effect on the Lessee (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to except for such Taxeffect which is not material), plus interest in which case such claim may be contested at the rate that would have been payable by request and expense of the relevant taxing authority Lessee, with respect such claim remaining subject to a refund of such Taxthe indemnification provided hereunder.
Appears in 1 contract
Sources: Lease and Security Agreement (Alternative Living Services Inc)
Contests. If a written any claim is shall be made against an Indemnitee any Indemnified Party or if any proceeding is shall be commenced against an Indemnitee any Indemnified Party (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 6.3, or if any Indemnified Party shall determine that any Imposition with respect to which the Lessee may have an indemnity obligation pursuant to this Section 6.3 may be payable, such Indemnitee Indemnified Party shall promptly give notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee shall not affect Lesseealter such Indemnified Party's obligations hereunder rights under this Section 6.3 except to the Owner Participant unless extent such failure shall effectively precludes or materially adversely affect affects the right ability to conduct a contest such claimof any Impositions) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Indemnitee Indemnified Party shall be required by law or regulation to take action prior to the end of such 30-day period, such Indemnitee shall, Indemnified Party shall in such notice to the Lessee, so inform Lessee, the Lessee and such Indemnitee Indemnified Party shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an Indemnitee 10 days after the receipt of such notice by the Lessee unless such Indemnified Party shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from such Indemnified Party (or such shorter period as such Indemnified Party has notified the Lessee is required by law or regulation for such Indemnified Party to commence such contest), to request in writing that such Indemnitee shallIndemnified Party contest in good faith the imposition of such Tax, at the expense Lessee's expense. If (a) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofIndemnified Party for which the Lessee has not agreed to indemnify such Indemnified Party, (Yb) such contest must be pursued in the name of such Indemnified Party, but can be pursued independently from any other proceeding involving a Tax liability of such Indemnified Party for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Indemnified Party or (Zc) if such Indemnified Party so requests, then the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide claim, acting through counsel reasonably acceptable to Lessee such information or data the Indemnified Party, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (b), if such Indemnitee shall consult with Lessee Indemnified Party determines reasonably and in good faith regarding that such contest by the manner of contesting such claim and shall keep Lessee reasonably informed regarding could have a material adverse impact on the progress business or operations of such Indemnified Party and provides a written explanation to the Lessee of such determination, such Indemnified Party may elect to control or reassert control of the contest. An Indemnitee , and provided that by taking control of the contest, the Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (a) and (b) above, each Indemnified Party shall not fail to take any action expressly required and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by this Section 6(b)(iv) (includingthe Lessee, without limitationsuch Indemnified Party shall control the contest of such claim, any action regarding any appeal of an adverse determination with respect acting through counsel reasonably acceptable to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv))Lessee. Notwithstanding the foregoing, in In no event shall an Indemnitee the Lessee be permitted to contest (or such Indemnified Party be required to pursue any contest (or to permit Lessee to pursue any contest) any claim, (a) if such Indemnified Party provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Equipment or any part thereof unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Indemnified Party in respect to such risk, (Ab) if a Default or an Event of Default has occurred and is continuing, (c) unless the Lessee shall have provided to such Indemnified Party an opinion of counsel reasonably acceptable to such Indemnified Party to the effect that such contest will, more likely than not, be successful, and unless the Lessee shall have agreed to pay and shall pay, to such Indemnitee Indemnified Party on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Indemnitee shall incur Indemnified Party actually incurs in connection with contesting such claimImposition including all reasonable in-house and outside legal, accounting, administrative and investigatory fees and disbursements, or (Bd) if such contest shall involve unless the Lessee makes full payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement contest. In addition for Indemnified Party controlled contests and claims contested in the name of such Indemnified Party in a public forum, no contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee shall be required: (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (Ca) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with in any audit involving any or all of the other Aircraft leased by the Owner Participant such Indemnified Parties with respect to Lessee or raised in any other audit period for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv6.3(b)) exceeds $250,000 and (b) unless, if requested by such Indemnified Party, the Lessee shall have provided to such Indemnified Party an opinion of counsel selected by the Lessee (which counsel must be reasonably acceptable to such Indemnified Party) (except, in the case of income Taxes indemnified hereunder, in which case such opinion shall be an opinion of independent tax counsel selected by such Indemnified Party and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim (or, in the case of an appeal of any adverse determination, an opinion of such counsel to the effect that the position asserted in such appeal will more likely than not prevail). In no event shall an Indemnified Party be required to appeal an adverse judicial determination to the United States Supreme Court. The party controlling the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions are to be taken shall be made by the controlling party in its sole judgment, provided, however, that if such Indemnified Party is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Indemnified Party rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Indemnified Party with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the non-controlling party with a copy of (or appropriate excerpts from) and reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Indemnified Party shall, at least $3,000the Lessee's expense, supply the Lessee with such information and documents, in such Indemnified Party's possession (but not tax returns, documentation related thereto or in violation of a privilege or duty of confidentiality), reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 6.3(b). Notwithstanding anything in this Section 6.3(b) to the foregoingcontrary, if no Indemnified Party shall enter into any Indemnitee shall release, waive, settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim for which it may be indemnifiable by Lessee pursuant entitled to be indemnified under this Section 6(b6.3 (and with respect to which contest is required under this Section 6.3(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Indemnified Party waives its right to indemnify be indemnified under this Section 6.3 with respect to such Indemnitee claim. Notwithstanding anything contained herein to the contrary, an Indemnified Party will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Indemnified Party shall waive its right to indemnification under this Section 6.3 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 1 contract
Contests. If a written any claim is shall be made against an Indemnitee any Indemnified Party or Lessor Party or if any proceeding is shall be commenced against an Indemnitee any Indemnified Party or Lessor Party (including a written notice of such proceeding) for Taxes any Tax as to which Lessee could there may be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunderpursuant to this Section 5.04 or Section 9.26, such Indemnitee Indemnified Party or Lessor Party shall promptly give Lessee notice (and in any event, within thirty (30) days) notify the Company in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Company within thirty (30) days shall not affect Lesseealter the Indemnified Party's obligations hereunder or Lessor Party's rights under this Section 5.04 or Section 9.26, except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax without the written consent of Lessee the Company (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by Lesseethe Company; provided, however, thatthat in the case of any such claim or proceeding, if such Indemnitee Indemnified Party or Lessor Party shall be required by law or regulation to take action prior to the end of such 30-day period, such Indemnitee shall, Indemnified Party or Lessor Party shall in such notice to Lesseethe Company, so inform Lesseethe Company, and such Indemnitee Indemnified Party or Lessor Party shall not take no any action with respect to such claim, proceeding or Tax without the consent of the Company (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an Indemnitee 10) days after the receipt of such notice by the Company unless such Indemnified Party or Lessor Party shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period. The Company shall be entitled for a period if of thirty (A)(I30) days from receipt of such notice from the failure Indemnified Party or Lessor Party (or such shorter period as the Indemnified Party or Lessor Party has notified the Company is required by law or regulation for the Indemnified Party or Lessor Party to commence such contest), to request in writing that the Indemnified Party or Lessor Party contest the imposition of such Tax, at the Company's sole cost and expense. If (x) such contest can be pursued in the name of the Company and independently from any other proceeding involving a Tax liability of such Indemnified Party or Lessor Party for which the Company has not agreed to indemnify such Indemnified Party or Lessor Party, (y) such contest must be pursued in the name of such Indemnified Party or Lessor Party, but can be pursued independently from any other proceeding involving a Tax liability of such Indemnified Party or Lessor Party for which the Company has not agreed to indemnify such Indemnified Party or Lessor Party or (z) such Indemnified Party or Lessor Party so pay requests, then the Company shall be permitted to control the contest of such claim, provided, that by taking control of the contest, the Company acknowledges that it is responsible for the Tax would result ultimately determined to be due by reason of such claim, provided further that in substantial penalties the case of a contest described in clause (unless immediately reimbursed x), (y) or (z), if such Indemnified Party or Lessor Party reasonably determines in good faith that such contest by Lesseethe Company could have a material adverse impact on the business or operations of such Indemnified Party or Lessor Party and provides a written explanation to the Company of such determination, such Indemnified Party or Lessor Party may elect to control or reassert control of the contest, and provided further, that in determining the application of clauses (x) and (y) of this sentence, such Indemnified Party or Lessor Party shall take any and all reasonable steps to segregate claims for any Taxes for which the act Company indemnifies hereunder from Taxes for which the Company is not obligated to indemnify hereunder, so that the Company can control the contest of paying the Tax would not prejudice former. In all other claims requested to be contested by the right Company, the Indemnified Party or Lessor Party shall control the contest of such claim and shall conduct such contest in good faith. In no event shall the Company be permitted to contest (or the Indemnified Party or Lessor Party be required to contest) any claim (IIA) if such Indemnified Party or Lessor Party provides the failure Company with a legal opinion of independent counsel that such action, suit or proceeding involves a material risk of imposition of criminal liability or could involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Property or any part of any thereof unless the Company shall have posted and maintained a bond or other security reasonably satisfactory to so pay would result the relevant the Indemnified Party or Lessor Party in criminal penalties and respect to such risk, (B) if an Event of Default has occurred and is continuing, unless the Company shall have posted and maintained a bond or other security satisfactory to the relevant Indemnified Party or Lessor Party in respect of the Taxes subject to such Indemnitee shall act claim and any and all expenses for which the Company is responsible hereunder reasonably foreseeable in connection with paying the Tax in contest of such claim, (C) unless the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee Company shall have agreed in writing to keep such information confidential other than pay and shall pay to the extent necessary in order to contest the claimrelevant Indemnified Party or Lessor Party within thirty (30) furnish Lessee with copies days of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including written demand therefor all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees expenses that such Indemnitee shall Indemnified Party or Lessor Party may incur in connection with contesting such claimTax including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Company shall provide to the Indemnified Party or Lessor Party an interest-free basis and advance in an amount equal to the Tax that the Indemnified Party or Lessor Party is required to pay (with no additional net after-tax cost costs (including Taxes) to such Indemnitee (Indemnified Party or Lessor Party). In addition, for the Indemnified Party or Lessor Party controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Indemnified Party or Lessor Party in a public forum, no contest shall be required (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Indemnified Party or Lessor Party with respect to any period for which Lessee would have there may be an indemnity obligation under this Section 6(b)(iv)5.04 or Section 9.26) is at least exceeds $3,000. Notwithstanding the foregoing75,000 and (B) unless, if requested by the Indemnified Party or Lessor Party, the Company shall have provided to the Indemnified Party or Lessor Party an opinion of independent tax counsel selected by the Company and reasonably acceptable to such Indemnified Party or Lessor Party, that a reasonable basis exists to contest such claim. In no event shall an Indemnified Party or Lessor Party be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions are to be taken shall be made by the controlling party in its sole judgment, provided, however, that if the Indemnified Party or Lessor Party is the controlling party and the Company recommends the acceptance of a settlement offer made by the relevant Governmental Authority and the Indemnified Party or Lessor Party rejects such settlement offer, then the amount for which the Company will be required to indemnify the Indemnified Party or Lessor Party with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party and its counsel reasonably informed as to the progress of the contest, and shall provide the noncontrolling party and its counsel with a copy of (or appropriate excerpts from) any Indemnitee reports or claims issued by the relevant auditing agent or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. The Indemnified Party or Lessor Party shall releasesupply the Company with such information and documents (or relevant portions thereof) reasonably requested by the Company as are necessary or advisable for the Company to participate in any action, waivesuit or proceeding to the extent permitted by this Section 5.04(h) and the Company shall promptly reimburse such Indemnified Party or Lessor Party for the reasonable expenses of supplying such information or documents; provided, however, that the Indemnified Party or Lessor Party shall not be required to provide to the Company copies of its tax returns or any other information, documentation or materials that it deems to be confidential or proprietary. No Indemnified Party or Lessor Party shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b5.04 or Section 9.26 (and with respect to which contest is required under this Section 5.04(h)) without the prior written permission consent of Lesseethe Company (such consent not to be unreasonably withheld), Lessee's obligation unless the Indemnified Party or Lessor Party waives its right to indemnify be indemnified under this Section 5.04 or Section 9.26 with respect to such Indemnitee claim. Notwithstanding anything contained herein to the contrary, the Indemnified Party or Lessor Party will not be required to contest (and the Company shall not be permitted to contest) a claim with respect to the imposition of any Tax if (i) the Indemnified Party or Lessor Party shall waive its right to indemnification under this Section 5.04 or Section 9.26 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claimwaiver) or (ii) such Tax is the sole result of a claim of a continuing and (B) shall pay to Lessee any amount consistent nature, which claim has previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by resolved against the relevant taxing authority with respect Indemnified Party or Lessor Party (unless a change in Law or facts has occurred since such prior adverse resolution and the Company provides an opinion of independent tax counsel reasonably acceptable to the Indemnified Party or Lessor Party to the effect that it is more likely than not that such change in Law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within 30 days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from such Tax Indemnitee (or such shorter period as such Tax Indemnitee has notified the Lessee is required by law or regulation for such Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of such Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if such Tax Indemnitee so requests, then the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), if such Tax Indemnitee shall consult with Lessee determines reasonably and in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting such Tax Indemnitee and provides a written explanation to the Lessee of such determination, such Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, the Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of the preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, such Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or such Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of contest, unless the Lessee shall provide to such contest on Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition for Tax Indemnitee controlled contests and claims contested in the name of such Tax Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee with respect to any period for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.5(b)) exceeds $75,000 or (B) unless, if requested by such Tax Indemnitee, the Lessee shall have provided to such Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by such Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement, provided, however, that if such Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such -50- 52 Participation Agreement settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall at least $3,000the Lessee's expense supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 13.5(b). Notwithstanding anything in this Section 13.5(b) to the foregoingcontrary, if any no Tax Indemnitee shall release, waive, enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.5 (and with respect to which contest is required under this Section 13.5(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.5 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification from Lessee under this Section 13.5 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax -------- Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.5, or if ------------ any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 13.5 may be payable, such ------------ Tax Indemnitee shall promptly give shall, within thirty (30) days, notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within thirty (30) days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.5 except to the Owner Participant unless extent ------------ such failure shall materially adversely affect precludes the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Impositions without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any -------- ------- such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Impositions without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Lessee unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period. The Lessee shall be entitled for a period if of sixty (A)(I60) days from receipt of such notice from such Tax Indemnitee (or such shorter period as such Tax Indemnitee has notified the failure Lessee is required by law or regulation for such Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee contest the imposition of such Tax, at the Lessee's expense. If (x) such contest can be pursued in the name of the Lessee and independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee or (y) such Tax Indemnitee so pay requests, then the Lessee shall be permitted to control the contest of such claim, provided, that by taking control of the contest, the Lessee acknowledges that it is responsible for the Impositions ultimately determined to be due by reason of such claim. In all other claims requested to be contested by the Lessee, such Tax would result in substantial penalties (unless immediately reimbursed by Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee) and . In no event shall the act of paying the Tax would not prejudice the right Lessee be permitted to contest (or such Tax Indemnitee required to contest) any claim (IIA) if such Tax Indemnitee provides the failure Lessee with a legal opinion of counsel reasonably acceptable to so pay would result the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Property Lien) on the Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in criminal penalties and its sole discretion in respect to such risk, (B) if a Lease Event of Default has occurred and is continuing, unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in its sole discretion in respect of the Taxes subject to such Indemnitee shall act claim and any and all expenses for which the Lessee is responsible hereunder is reasonably foreseeable in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereofclaim, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImpositions including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of contest, unless the Lessee shall provide to such contest on Tax Indemnitee an interest-free basis and advance in an amount equal to the Impositions that the Tax Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition, for Tax Indemnitee controlled contests and claims contested in the name of such Tax Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee with respect to any period for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.5(b)) exceeds $100,000 and (B) unless, if requested by such Tax -------------- Indemnitee, the Lessee shall have provided to such Tax Indemnitee an opinion of counsel selected by the Lessee and reasonably acceptable to such Tax Indemnitee (except, in the case of income taxes indemnified hereunder, in which case such opinion shall be an opinion of independent tax counsel selected by such Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim (or, in the case of an appeal of an adverse determination, and opinion of such counsel to the effect that there is substantial authority for the position asserted in such appeal). In no event shall an Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. In addition, an Tax Indemnitee shall not be required to contest any claim in its name (or that of an Affiliate) if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely by a court of competent jurisdiction pursuant to the contest provisions of this Section 13.5(b), unless there shall have been a -------------- change in law (or interpretation thereof) and the Tax Indemnitee shall have received, at least $3,000the Lessee's expense, an opinion of independent tax counsel selected by the Lessee and reasonably acceptable to the Tax Indemnitee stating that as a result of such change in law (or interpretation thereof), it is more likely than not that the Tax Indemnitee will prevail in such contest. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall, at the Lessee's expense, supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 13.5(b). Notwithstanding -------------- anything in this Section 13.5(b) to the foregoingcontrary, if any no Tax Indemnitee shall release, waive, enter -------------- into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which is entitled to be indemnified under this Section 13.5 ------------ (and with respect to which contest is required under this Section 13.5(b)) -------------- without the prior written consent of the Lessee, unless such Tax Indemnitee waives its right to be indemnified under this Section 13.5 with respect to such ------------ claim. No settlement of any contest may be indemnifiable made by the Lessee pursuant without the Tax Indemnitee's written consent, which consent shall not be unreasonably withheld. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee 13.5 ------------ with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 1 contract
Sources: Participation Agreement (Palm Inc)
Contests. If (a) After the Closing, the Purchaser shall promptly notify the Seller in writing of (i) the initiation of any audit or other examination by a written claim is made against an Indemnitee or if taxing authority of any proceeding is commenced against an Indemnitee Pre-Closing Period and (including a ii) any written notice of such proceeding) a proposed assessment or claim in an audit or administrative or judicial proceeding of the Purchaser or any member of the Target Group which, if determined adversely to the taxpayer, would be grounds for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (indemnification under this Article VII; provided, however, that the failure to provide give such notice shall will not affect Lessee's obligations hereunder the Purchaser’s right to indemnification under this Article VII except to the Owner Participant unless extent, if any, that such failure shall to promptly provide notice materially adversely affect affected the right ability of the Seller to contest such claim) and shall not take any action with respect to such claim successfully avoid or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay materially reduce the Tax claimed and ▇▇▇ for a refund prior to liability in question.
(b) In the end case of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest an audit or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated relates to Pre-Closing Period, the transactions contemplated by Seller shall have the Operative Documents without, right at its expense to participate in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to and control the conduct of such audit or proceeding; the Purchaser also may participate, at its own expense, in any such audit or proceeding, provided that the Purchaser may not settle such audit or proceeding and shall provide without the Purchaser’s consent if the Seller does not agree prior to Lessee entering into such information settlement to pay the resulting Tax. I If the Seller does not assume the control of any such audit or data that is proceeding, the Purchaser may defend the same in such Indemnitee's control manner as it may deem appropriate, including settling such audit or possession that is reasonably necessary proceeding, subject to conduct such contestthe Seller’s consent, which shall not be unreasonable withheld or delayed. In the case of event that issues relating to a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that potential adjustment are required to be paid prior contested in the same audit or proceeding as separate issues relating to a potential adjustment for which the Purchaser would be liable, the Purchaser shall have the right, at its expense, to control the audit or proceeding with respect to the commencement latter issues, except to the extent that it would be harmful to the Seller.
(c) With respect to issues relating to a potential adjustment for which both the Seller and the Purchaser or any member of the Target Group could be liable, (i) both the Seller and the Purchaser may participate in the audit or proceeding and (ii) the audit or proceeding shall be controlled by the Purchaser, and the Seller and Purchaser shall take commercially reasonable efforts to separate such contest on an interestaudit or proceeding so that issues relating to each of them can be handled separately. The principle set forth in this Section 7.04(c) also shall govern for purposes of deciding any issue that must be decided jointly (including choice of judicial forum) in situations in which separate issues are otherwise controlled under this Article VII by the Purchaser and the Seller.
(d) With respect to any Tax audit or proceeding for a Pre-free basis and with no additional net after-tax cost Closing Period, neither the Purchaser nor the Seller shall enter into any compromise or agree to settle any claim pursuant to such Indemnitee (and audit or proceeding which would adversely affect the other party for such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that taxable period or a subsequent taxable period without the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all written consent of the other Aircraft leased by party, which consent shall be timely and shall not be unreasonably withheld, delayed or conditioned. The Purchaser and the Owner Participant Seller agree to Lessee cooperate, and the Purchaser agrees to cause its Affiliates to cooperate, in the defense against or raised compromise of any claim in any other such audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxproceeding.
Appears in 1 contract
Sources: Master Purchase Agreement (China Lodging Group, LTD)
Contests. (a) Nothing in this Agreement shall be construed to prevent UpREIT from contesting, as the Tax Matters Partner in accordance with the Partnership Agreement as part of the unified audit of the Partnership, any claim involving a UpREIT item that, if successful, would result in an Income Inclusion (a "Partnership Level Issue").
(b) If UpREIT contests a written claim is made against Partnership Level Issue that, if successful, would result in an Indemnitee or if any proceeding is commenced against an Indemnitee Income Inclusion, UpREIT's liability for indemnification under Section 4 hereof shall, at UpREIT's election, be deferred until thirty (including 30) days after a written notice Final Determination of such proceedingHadesman Indemnitee's federal income tax liability in respect of an Income Inclusion.
(c) for Taxes If any audit or proceeding involving an indemnifiable adjustment is being conducted in a proceeding involving such Hadesman Indemnitee, which cannot be transferred to the UpREIT as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that partnership item (a Tax is due for which Lessee could have an indemnity obligation hereunder"Hadesman Level Issue"), such Hadesman Indemnitee shall hereby agrees (i) promptly give Lessee notice to notify UpREIT in writing of such claim adjustment (and the failure of such Hadesman Indemnitee to so notify UpREIT shall preclude any indemnity hereunder to the extent UpREIT's right to effect its contest rights hereunder has been precluded by such failure), and (ii) upon UpREIT's delivery to Hadesman of a written opinion of nationally recognized tax counsel reasonably acceptable to such Hadesman Indemnitee ("Tax Counsel") to the effect that there is a Realistic Possibility of Success upon contest, such Hadesman Indemnitee will contest that adjustment by filing a protest and administrative appeal and prosecuting the same in good faith; provided, however, that such Hadesman Indemnitee will not be obligated to pursue an administrative appeal if such Hadesman Indemnitee instead pursues relief in Tax Court or a court having refund jurisdiction.
(d) If, within 30 days following the failure of such administrative proceedings with respect to provide a Hadesman Level Issue, UpREIT delivers to Hadesman Indemnitee written opinion of Tax Counsel to the effect that there is a Realistic Possibility of Success if the proposed adjustment is presented to a court for resolution, then such notice Hadesman Indemnitee will contest the proposed adjustment in good faith in the Tax Court or by paying the tax (and any applicable interest and penalties) and suing for refund in the Court of Federal Claims or appropriate Federal District Court. If, within 30 days following a final adverse decision of such court with respect to such Hadesman Level Issue, UpREIT delivers to such Hadesman Indemnitee a written opinion of Tax Counsel to the effect that it is more likely than not that such decision would be reversed on appeal, then such Hadesman Indemnitee will appeal such decision to the appropriate Federal Court of Appeals. With respect to any of the above-described proceedings, such Hadesman Indemnitee will keep UpREIT and its counsel informed as to the progress of such proceedings, give UpREIT and its counsel the opportunity to review and comment in advance on all written submissions and filings relevant to indemnifiable issues (after making appropriate redactions to preserve the confidentiality of the such Hadesman Indemnitee return as to other issues), and consider in good faith any suggestions made by UpREIT or its counsel.
(e) Such Hadesman Indemnitee shall present any settlement offer provided to such Hadesman Indemnitee pursuant to a Hadesman Level Issue to UpREIT. If UpREIT recommends acceptance of a settlement offer of a Hadesman Level Issue or if the Tax Matters Partner recommends acceptance of a settlement offer in respect of a Partnership Level Issue, but such Hadesman Indemnitee declines to accept such offer in writing within 30 days (if such Hadesman Indemnitee does not respond within 30 days, such lack of response shall be treated as acceptance of UpREIT's or the Tax Matters Partner's recommendation, respectively), (1) the obligation of UpREIT to make indemnity payments as the result of any such contest or proceedings shall not affect Lessee's obligations hereunder to thereafter exceed the Owner Participant unless obligation that it would have had if such failure contest had been settled or proceeding terminated on the basis recommended by UpREIT or the Tax Matters Partner, as applicable, and (2) in the case of a Hadesman Level Issue, UpREIT shall materially adversely affect have no further liability for costs or other expenses in respect of such contest.
(f) Notwithstanding the right foregoing, such Hadesman Indemnitee will have no obligation to contest such claim) and shall not take any action with respect to a Hadesman Level Issue (i) unless such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law items could give rise to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so a federal income tax liability (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax disregarding other items in the manner that is the least prejudicial to the pursuit assessment and considering effects in future years) in excess of the contest). In addition$25,000, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimii) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticewithout UpREIT paying when due, such Indemnitee shall, at the expense of Lessee (including all reasonable third-party costs and out-of-pocket expenses including reasonable legal, witness and accounting fees and other expenses and, in the case of proceedings before the Court of Federal Claims or Federal District Court, the amount of tax (and any applicable interest and penalties) for which refund is claimed, and (iii) to the extent such Hadesman Indemnitee waives in writing UpREIT's obligation to indemnify such Hadesman Indemnitee for such items, in which case all third- party costs and reasonable attorney out-of-pocket expenses described in clause (ii) thereafter incurred and accountants fees), in good faith contest all taxes would be paid by such Hadesman Indemnitee.
(or, if permitted by applicable law, allow Lessee to contestg) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Hadesman Indemnitee shall appeal not settle any adverse administrative or judicial decision, except such Hadesman Level Issue without UpREIT's consent; provided that the such Hadesman Indemnitee shall not be required to pursue contest any appeals to the United States Supreme Court. If proposed adjustment and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of may settle any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) proposed adjustment if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Hadesman Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), Agreement with respect to such Tax adjustment and any Income Inclusion that results from such adjustment and, in the case of proceedings before the Court of Federal Claims or Federal District Court, shall pay to UpREIT the amount of tax (and any directly related claim applicable interest and any claim the outcome of which is determined based upon the outcome of such claimpenalties) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) UpREIT with respect to such Taxadjustment or the contest of such adjustment under Section 6(f), plus interest at ___% computed from the rate that would have been payable time such amounts were paid or advanced by UpREIT.
(h) Within thirty (30) days after a Final Determination of the liability of such Hadesman Indemnitee in respect of a Hadesman Level Issue, UpREIT and each Hadesman Indemnitee agree to pay each other, as applicable, the net amount of (i) the payment owed by the relevant taxing authority UpREIT to such Hadesman Indemnitee of any indemnification hereunder, not theretofore paid resulting from the outcome of such contest, and (ii) in the case of proceedings before the Court of Federal Claims or Federal District Court, the repayment owed by such Hadesman Indemnitee to UpREIT of the amount of tax (and any applicable interest and penalties) previously paid or advanced by UpREIT with respect to a refund such adjustment or the contest of such Taxadjustment under Section 6(f), together with any interest received by or credited to such Hadesman Indemnitee that is attributable to such advance.
Appears in 1 contract
Sources: Tax Indemnification Agreement (Prime Group Realty Trust)
Contests. If a written claim for payment is made by any taxing authority against an Indemnitee or if for any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required liable for indemnity pursuant to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticethis Section 7.4 (a "Tax Claim"), such Indemnitee shallshall give Lessee written notice of such Tax Claim promptly after its receipt, and shall furnish Lessee with copies of such Tax Claim and all other writings received from the taxing authority to the extent relating to such claim. The Indemnitee shall not pay such Tax Claim until at least thirty (30) days after providing Lessee with such written notice, unless required to do so by law or regulation. Subject to the expense of conditions set forth in the following paragraph, Lessee shall be entitled to contest (including all reasonable out-of-pocket costs acting through counsel selected by Lessee and reasonable attorney and accountants feesreasonably acceptable to the Indemnitee), and control the contest of, any Tax Claim if (i) the contest of the Tax Claim may be pursued in the name of Lessee; (ii) the contest of the Tax Claim must be pursued in the name of the Indemnitee but can be pursued independently from any other proceeding involving a tax liability of such Indemnitee for which Lessee is not responsible or (iii) the Indemnitee requests that Lessee control such contest. In the case of all other Tax Claims, subject to the conditions set forth in the following paragraph, the Indemnitee shall contest the Tax Claim if Lessee shall request that the Tax be contested, and the following rules shall apply with respect to such contest:
(1) the Indemnitee shall control the contest of such Tax Claim in good faith taking into account any and all tax consequences to the Indemnitee, including, without limitation, those associated with a recharacterization of the transaction contemplated by the Operative Documents by any taxing authority (acting through counsel selected by the Indemnitee and reasonably acceptable to Lessee), and
(2) the Indemnitee shall not otherwise settle, compromise or abandon such contest without Lessee's prior written consent except as provided in the concluding paragraph to this Section 7.4(b). In either case, the party conducting such contest shall consult with and keep reasonably informed the other party and its designated counsel with respect to such Tax Claim, shall provide the other party with copies of any reports or claims issued by the relevant auditing agents or taxing authority as well as related portions of tax returns, and shall consider and consult in good faith with the other party regarding any request, including but not limited to requests (or, a) to resist payment of Taxes if permitted by applicable law, allow Lessee practical and (b) not to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of pay such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper (but the decisions regarding what actions are to be taken shall be made by the controlling party in its sole judgment). Notwithstanding the foregoing, no contest with respect to a Tax Claim shall be required or permitted and Lessee shall be required to pay the applicable Taxes without contest, unless:
(Z1) within thirty (30) days after notice by the Indemnitee to Lessee of such Tax Claim, Lessee shall request in writing to the Indemnitee that such Tax Claim be contested; provided that if a shorter period is required for taking action with respect to such Tax Claim and the payment is madeIndemnitee notifies Lessee of such requirement, using Lessee shall use reasonable efforts to obtain request such contest within such shorter period,
(2) no Event of Default has occurred and is continuing,
(3) there is no risk of sale, forfeiture or loss of, or the creation of a refund thereof Lien on Lessee's interest in the Leased Property as a result of such Tax Claim (other than a Permitted Lien); provided that this clause (3) shall not apply if Lessee posts security satisfactory to the Indemnitee in its sole discretion, or the Tax is fully paid in either manner specified in clause (5) below,
(4) there is no risk of imposition of any criminal penalties,
(5) if such contest involves payment of such Tax, Lessee shall either advance to the Indemnitee on an appropriate administrative and/or judicial proceeding. If requested interest-free basis, and with no after-tax cost to do so by Lesseesuch Indemnitee, the amount of the Tax (a "Tax Advance") or pay such Indemnitee shall appeal any adverse administrative or judicial decisionthe amount payable by Lessee pursuant to this Section 7.4 with respect to such Tax,
(6) Lessee agrees to pay (and pay on demand) and with no after-tax cost to such Indemnitee, except that al1 reasonable costs, losses and expenses incurred by the Indemnitee shall not be required in connection with the contest of such claim (including all reasonable legal, accounting and investigatory fees and disbursements),
(7) the Indemnitee has been provided at Lessee's sole expense with an opinion, reasonably acceptable to pursue any appeals such Indemnitee, of independent tax counsel of recognized standing selected by Lessee and reasonably acceptable to the United States Supreme Court. If and Indemnitee to the extent effect that there is a reasonable basis for contesting such Tax Claim,
(8) the Indemnitee is able to separate amount of Taxes in controversy, taking into account the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated amount of all similar and logically related Taxes with respect to the transactions contemplated by the Operative Documents withoutthat could be raised in any other year (including any future year) not barred by the statute of limitations, exceeds $150,000,
(9) Lessee shall acknowledge in writing their liability to indemnify the good faith judgment Indemnitee hereunder in respect of such Indemniteeclaim if the contest is not successful, adversely affecting such Indemnitee, such provided that if the Indemnitee shall permit Lessee to was in control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee , such acknowledgment of liability shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) binding if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless resolved on a clearly articulated basis that establishes that Lessee has provided security for its obligations hereunder by advancing would not have been required to indemnify the Indemnitee in the absence of such Indemnitee before proceeding with such contestacknowledgment, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and and
(E10) in the case of a contest that is being pursued judicial appeal, no appeal to the U.S. Supreme Court shall be required of the Indemnitee or shall be permitted by an IndemniteeLessee. Notwithstanding anything to the contrary contained in this Section 7.4, the aggregate amount of Indemnitee at any time may elect to decline to take any action or any further action with respect to a Tax Claim and may in its sole discretion settle or compromise any contest with respect to such Tax Claim without Lessee's consent if the claim Indemnitee:
(together with the amount of all similar or logically related claims that have been or could be raised with 1) waives its right to any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable payment by Lessee pursuant to this Section 6(b7.4 in respect of such Tax Claim (and any other claim for Taxes with respect to any other taxable year and/or with respect to any other claim, the contest of which is effectively precluded by the Indemnitee's declination to take action with respect to the Tax Claim), and
(2) promptly repays to Lessee any Tax Advance and any amount paid to such Indemnitee under this Section 7.4 in respect of such Taxes, but not any costs or expenses with respect to any such contest. Except as provided in the preceding sentence, any such waiver shall be without prejudice to the written permission rights of Lessee, Lessee's obligation to indemnify such the Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any other Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxClaim.
Appears in 1 contract
Contests. If a written claim is made against In respect of the indemnification provided under Section 11.1(a), promptly after receipt by an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written of notice of such proceeding) for Taxes as to which Lessee could be liable for payment any pending or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunderthreatened Claim, such Indemnitee shall promptly shall, if a claim for indemnification in respect thereof is to be made against Lessee give Lessee written notice in writing of such claim (provided, however, thereof to Lessee; provided that the failure to provide such prompt notice shall not affect limit Lessee's obligations hereunder to the Owner Participant unless or prejudice any rights of such failure shall materially adversely affect the right to contest such claimIndemnitee under Section 11.1(a) and shall not take any action with respect to such claim or Tax without Claim, except to the consent extent that such failure to provide prompt notice adversely affects Lessee's indemnification obligations hereunder. So long as no Lease Event of Default is continuing, Lessee for at its own expense, may elect to assume the defense of any such Claim through its own counsel, which shall be subject to the reasonable approval of the Indemnitee, on behalf of the Indemnitee (with full right of subrogation to the Indemnitee's rights and defenses). Lessee must indicate its election to assume such defense by written notice to the Indemnitee within 30 days following the receipt of Indemnitee's notice of the Claim, or in the case of a third party claim which requires a shorter time for response then within such shorter period as specified in the Indemnitee's notice by Lesseeof Claim; provided, however, that, if provided that such Indemnitee shall be required by law has given Lessee notice thereof. If Lessee denies liability or fails to take action prior respond to the end of such 30-day periodnotice within the time period set forth above, such the Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long may defend or compromise the Claim as it is legally able deems appropriate without prejudice to do so (it being understood that an Indemnitee shall be entitled any of Indemnitee's rights hereunder and with no further obligation to pay inform Lessee of the Tax claimed status of the Claim and ▇▇▇ for a refund prior no right of Lessee to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest approve or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act disapprove any actions taken in connection with paying therewith by the Tax in the manner that is the least prejudicial to the pursuit of the contest)Indemnitee. In addition, such Indemnitee shall (provided that If Lessee shall have agreed elected to keep assume the defense of any such information confidential other than to Claim, then upon the extent necessary in order to contest request of Lessee, the claimIndemnitee requesting payment of indemnity under Section 11.1(a) shall promptly furnish Lessee with copies of any requests for information from records or documents pertaining to the matter to be indemnified and, to the extent known by such Indemnitee, a reasonably detailed explanation of the circumstances giving rise to the claim of indemnification and the determination of the amount of the requested indemnity payment. Upon payment in full to Indemnitee of any taxing authority relating indemnity pursuant to Section 11.1(a), Lessee shall be subrogated to any right of Indemnitee in respect of the matter against which such Taxes with respect to which Lessee may be required to indemnify hereunderindemnity has been paid. If requested by Lessee in writing within 30 days after its receipt shall have elected to assume the defense of any such noticeClaim, such upon the written request at any time and from time to time of Lessee, Indemnitee shall, at the expense of Lessee, take such reasonable actions and execute such documents as are necessary or reasonably appropriate to assist Lessee (including all reasonable out-of-pocket costs in the preservation and reasonable attorney enforcement against third parties of Lessee's right of subrogation hereunder. The Indemnitee may employ separate counsel in any such Claim and accountants fees)participate in the defense thereof, in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative but the fees and judicial proceedings the validity, applicability or amount expenses of such Taxes by (X) resisting payment thereof, (Y) not paying counsel shall be at the same except under protest if protest is necessary and proper or (Z) if expense of the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, Indemnitee unless the Indemnitee shall appeal any adverse administrative or judicial decision, except have been advised by its counsel that a conflict of interest exists in Lessee's counsel's representations of the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents withoutLessee, in which case the good faith judgment fees and expenses of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee 's counsel shall permit Lessee to control be for the conduct account of any such proceeding Lessee. All fees and expenses shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) periodically as incurred. So long as no Lease Event of Default shall have occurred and be continuing at the time the contest is begun continuing, Lessee shall not be liable for any LSI Logic Corporation Lease A settlement of any such Claim effected without its consent unless Lessee has provided security for its obligations hereunder by advancing shall fail to, or elect in writing not to, assume the defense thereof in which case the Indemnitee, without waiving any rights to indemnification hereunder, may defend such Indemnitee before proceeding with such contestClaim and enter into any good faith settlement thereof without the prior written consent of Lessee. Lessee shall not, without the amount prior written consent (not to be unreasonably withheld) of the Tax being contestedIndemnitee, plus effect any interest settlement of any such Claim unless such settlement includes an unconditional release of the Indemnitee from all liabilities that are the subject of such Claim. The parties agree to cooperate in any defense or settlement of any such Claim and penalties and an amount estimated in good faith by such Indemnitee for to give each other reasonable expenses, and (E) access to all information relevant thereto subject to appropriate confidentiality agreements. The parties will similarly cooperate in the case prosecution of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee or lawsuit against any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxthird party.
Appears in 1 contract
Contests. If a New Holdco agrees to give written claim is made against an Indemnitee or if notice to the ▇▇▇▇▇▇▇ Appointees of the receipt of any proceeding is commenced against an Indemnitee (including a written notice by any AINC Party, and the Bennetts agree to give to New Holdco written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such any written notice by Lesseeany of them or MJB Investments, of a Tax Claim which could result in liability for, or could reasonably be expected to adversely affect, the other Party. The ▇▇▇▇▇▇▇ Appointees shall have the right (but not the obligation) to control, at their own expense (taking into account payments made under the Transition Cost Sharing Agreement), the contest or resolution of any Tax Claim that relates solely to a Pre-Closing Tax Period; provided, however, that, (a) the ▇▇▇▇▇▇▇ Appointees will have provided written notice to New Holdco within 30 days of the receipt of written notice of the Tax Claim of their intention to control such Tax Claim, and (b) the ▇▇▇▇▇▇▇ Appointees will obtain the prior written consent of New Holdco (which consent will not be unreasonably withheld or delayed) before entering into any settlement or concession of such Tax Claim if such Indemnitee shall settlement or concession could reasonably be required by law expected to take action prior adversely affect any AINC Party; provided, further, that to the end extent such Tax Claim could reasonably be expected to adversely affect any AINC Party or relates to any entity-level Tax liability of such 30-day perioda Remington Company, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall x) New Holdco will be entitled to pay participate in the defense of such Tax claimed Contest and to employ counsel of its choice for such purpose, the fees and expenses of which separate counsel will be borne by New Holdco, and (y) the ▇▇▇▇▇▇▇ for Appointee will promptly keep New Holdco reasonably informed of all material developments related to such Tax Claim, promptly provide New Holdco with copies of (and a refund prior reasonable opportunity to comment on) all written materials to be provided to the end applicable Governmental Authority (including good faith consideration of any such 30-day period if comments) related to such Tax Claim (A)(I) or the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) relevant excerpts thereof), and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee promptly provide New Holdco with copies of any requests for information correspondence received from any taxing authority relating the applicable Governmental Authority related to such Taxes with respect to which Lessee Tax Claim (or relevant excerpts thereof). The AINC Parties may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt control the contest or resolution of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal defend against any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and Tax Claim to the extent the Indemnitee is able ▇▇▇▇▇▇▇ Appointees are not entitled to separate control such Tax Claim, or have not timely notified the contested issue or issues from other issues arising AINC Parties that they will control such Tax Claim, pursuant to the preceding sentence, at the sole cost and expense of the AINC Parties; provided that the AINC Parties will promptly notify the ▇▇▇▇▇▇▇ Appointees upon taking control of such Tax Claim and the ▇▇▇▇▇▇▇ Appointees will be entitled to participate in the same administrative or judicial proceeding that are unrelated defense of such Tax Claim and to employ counsels of their choice for such purpose, the transactions contemplated fees and expenses of which separate counsel will be borne by the Operative Documents without, in respective Remington Parties (taking into account payments made under the good faith judgment of Transition Cost Sharing Agreement); provided further that (i) such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information Tax Claim may not be settled or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim conceded without the prior written consent of Lessee the ▇▇▇▇▇▇▇ Appointees, which consent will not be unreasonably withheld or delayed, and (except as contemplated by this Section 6(b)(iv)). Notwithstanding ii) the foregoingAINC Parties will promptly keep the ▇▇▇▇▇▇▇ Appointees reasonably informed of all material developments related to such Tax Claim, in no event shall an Indemnitee promptly provide the ▇▇▇▇▇▇▇ Appointees with copies of (and a reasonable opportunity to comment on) all written materials to be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (provided to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee applicable Governmental Authority (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests including good faith consideration of any such Indemniteecomments) related to such Tax Claim (or the relevant excerpts thereof), (D) no Lease Event and promptly provide the ▇▇▇▇▇▇▇ Appointees with copies of Default shall have occurred and be continuing at any correspondence received from the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing applicable Governmental Authority related to such Indemnitee before proceeding with such contest, Tax Claim (or the amount of relevant excerpts thereof). In the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case event of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in conflict between this Section 7.05 and any other audit for which Lessee would have an indemnity obligation under section of this Agreement, this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee 7.05 will govern with respect to such claim (and all directly related claims and claims based on the outcome control of such claim) shall terminateTax Claims. Notwithstanding anything to the contrary in this Article VII, subject to this Section 6(b)(iv)the Transition Cost Sharing Agreement, and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee none of the AINC Parties will have any amount previously paid or advanced to such Indemnitee rights with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority any Tax Claim with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b)Kylemore Investments, an Indemnitee will not be required to contest the imposition of LP (including any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), Claim with respect to such Tax (and any directly related claim and any claim the outcome of which an affiliated, combined, consolidated, unitary or similar group that includes Kylemore Investments, LP) that is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) not with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxany Remington Company (other than RHC).
Appears in 1 contract
Sources: Combination Agreement (Ashford Inc.)
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a a) Buyer agrees to give prompt written notice to Seller Representative of such proceeding) for Taxes as to the receipt of any written notice by the Company, Buyer or any of Buyer’s Affiliates which Lessee could be liable for payment or indemnity hereunderinvolves the assertion of any claim, or if an Indemnitee makes a determination that a Tax is due for the commencement of any Action, in respect of which Lessee could have an indemnity obligation hereunder, such may be sought by any Buyer Indemnitee shall promptly give Lessee notice in writing of such claim pursuant to this Article VII (a “Tax Claim”); provided, however, that the failure to provide such notice comply with this provision shall not affect Lessee's obligations a Buyer Indemnitee’s right to indemnification hereunder except to the Owner Participant unless such failure shall materially adversely affect extent the right defense of the Claim is prejudiced thereby.
(b) Within fifteen (15) Business Days after receipt by Seller Representative of a notice respecting a Tax Claim, the Seller Representative may elect, so long as Sellers have an obligation to contest such claim) and shall not take any action indemnify Buyer Indemnitees hereunder with respect to such claim or Tax without Claim, by written notice to Buyer, to contest the consent Tax Claim in the name of Lessee for 30 days following the receipt of such notice by Lessee; providedCompany. If Seller Representative so elects, however, that, if such Indemnitee Sellers shall be required by law to take action prior to solely responsible for the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit defense of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than item or items at issue to the extent necessary in order it relates to contest a Pre-Closing Tax Period, except that (a) the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes Seller Representative will keep Buyer informed with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt the commencement, status and nature of any such noticeproceeding, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney will reasonably cooperate with Buyer and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control consult with Buyer regarding the conduct of or positions taken in any such proceedings in the event the settlement would create a Tax liability on part of Buyer, and (b) Sellers will not enter into any settlement or otherwise compromise any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee Buyer (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoingsuch consent not to be unreasonably withheld, in no event shall an Indemnitee be required to pursue any contest (conditioned or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (Bdelayed) if such contest shall involve settlement would have the payment effect of materially increasing the Tax liability or materially reducing any Tax asset of the claimCompany in respect of any Post-Closing Tax Period. Buyer will cause the Company to reasonably cooperate, Lessee in the contest of such Tax Claim by making relevant documents and employees available to Sellers and/or Seller Representative, and to execute such documents (including powers of attorney) as may be reasonably necessary to allow Sellers and/or Seller Representative to conduct the defense.
(c) With respect to any other Tax Claim, including a Tax Claim related to a Straddle Period and a Tax Claim that the Seller does not elect to control, Buyer shall advance have sole responsibility for the amount thereof plus defense of the item or items at issue provided (a) Sellers will have the right (but not the duty) to participate in the defense of such proceeding and to employ counsel, at their own expense, separate from counsel employed by Buyer, (b) Buyer will keep Sellers informed with respect to the extent indemnified hereunder) interestcommencement, penalties status and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests nature of any such Indemnitee)proceeding, (D) no Lease Event and will reasonably cooperate with Sellers and consult with them regarding the conduct of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to or positions taken in any such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expensesproceeding, and (Ec) in Buyer will not enter into any settlement or otherwise compromise any such proceeding without the case of a contest that is being pursued by an Indemnitee, the aggregate amount prior written consent of the claim (together with the amount of all similar Seller Representative if Sellers would be obligated to pay or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in Tax under this Section 6(b)Agreement, an Indemnitee which consent will not be required to contest the imposition of any Tax and shall be permitted to settle unreasonably withheld, conditioned or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxdelayed.
Appears in 1 contract
Contests. If If, within 30 days of receipt of a written claim is made against an Indemnitee or if any proceeding is commenced against Tax Notice from an Indemnitee (including a written notice of or such proceeding) for Taxes shorter period as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of has notified the Company is required by law or regulation for such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right Indemnitee to contest such claim) and Tax Loss), the Company shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if request in writing that such Indemnitee shall be required by law to take action prior to the end of contest such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticeLoss, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)Company's expense, in good faith conduct and control such contest (orincluding, if permitted without limitation, by applicable lawpursuit of appeals) by, allow Lessee to contest) through appropriate administrative and judicial proceedings in the validitysole discretion of the Company, applicability or amount of such Taxes by (Xi) resisting payment thereof, (Yii) not paying the same except under protest protest, if protest is necessary and proper or proper, (Ziii) if the payment is be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If proceedings, or (iv) taking such other action as is reasonably requested by the Company from time to do so by Lesseetime; PROVIDED, HOWEVER, that (x) if such contest can be pursued independently from any other proceeding involving a Tax liability of such Indemnitee, such Indemnitee, at the Company's request, shall allow the Company to conduct and control such contest and (y) in the case of any contest that the Company is not entitled to control, the Indemnitee shall appeal any adverse administrative may request the Company to conduct and control such contest if possible or judicial decisionpermissible under applicable law or regulation. Notwithstanding the foregoing provisions of this Section 4, except that the such Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal and the Company shall not be able to contest such claim or Tax in its own name or that of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an such Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (Ai) Lessee the Company shall have agreed to pay pay, and shall pay, to such Indemnitee on demand all reasonable out-of-of- pocket third party costs and reasonable attorney and accountants fees expenses that such Indemnitee shall may incur in connection with contesting such claimclaim or Taxes, including all reasonable legal (including non-duplicative internal counsel), accounting and investigatory fees and disbursements, (Bii) if such contest shall involve the payment amount of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment)potential indemnity exceeds $50,000, (Ciii) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss criminal penalties and (iv) if such contest shall involve the payment of the Aircraft Tax prior to the contest, the Company shall, at its option (unless Lessee and notwithstanding anything herein to the contrary), either (A) pay such Indemnitee for such Taxes or (B) provide to such Indemnitee an interest-free advance in an amount equal to the Tax which such Indemnitee is required to pay (with no additional net after-tax cost to such Indemnitee). In no event shall have an Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. Any Indemnitee shall consult in good faith with the Company regarding the conduct of any contest controlled by such Indemnitee, shall keep the Company fully informed as to the status of the contest and shall consider in good faith all suggestions made provisions to protect by the interests Company regarding the conduct of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv)preserving counsel privilege in the Indemnitee's reasonable judgment. An Indemnitee shall not have the right to settle or compromise a contest without the prior written consent of the Company, and subject such consent not to Section 6(b)(iii)be unreasonably withheld. If an Indemnitee agrees to a settlement or compromise of such contest without the prior written consent of the Company, such Indemnitee shall repay waive its rights to Lessee any amount previously paid or advanced to such Indemnitee with indemnity from the Company that otherwise would be payable in respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee the Company any amount previously paid or advanced by Lessee the Company pursuant to this Section 6(b) 4 with respect to such Tax, plus interest at the rate that would have been payable Taxes other than contest costs paid by the relevant taxing authority with respect Company pursuant to a refund of this Section 4 as it relates to such Taxcontest.
Appears in 1 contract
Sources: Tax Indemnity Agreement (Safety Insurance Group Inc)
Contests. If a written claim is made against an Tax Indemnitee or if any proceeding is commenced against an Indemnitee (including receives a written notice from any -------- taxing authority of such proceeding) a claim for Taxes as to any Tax for which Lessee could the Charterer may be liable for payment or indemnity hereunder, or if an Indemnitee makes under this Section 12.2 (a determination that a "Tax is due for which Lessee could have an indemnity obligation hereunderClaim"), such Tax Indemnitee shall notify the --------- Charterer promptly give Lessee notice in writing of such claim Tax Claim. If requested by the Charterer in writing within twenty (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim20) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the Business Days after receipt of such notice by Lessee; provided, however, that(or, if sooner, on or before the last day on which the contest of such Indemnitee shall Tax Claim can be required by law to take action prior initiated, provided that the Tax Indemnitee's notice to the end of Charterer discloses such 30-day perioddate), such Tax Indemnitee shall, in such notice upon receipt of an indemnity satisfactory to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled whereby the Charterer agrees to pay the to such Tax claimed Indemnitee all reasonable costs and ▇▇▇ for a refund prior to the end of expenses (including legal and accountants' fees and disbursements) incurred by such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the contesting such Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, Claim and at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)the Charterer, in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes Tax Claim by (X1) resisting payment - thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriate, (Y2) not paying the same except under protest - protest, if protest is necessary and proper or proper, and/or (Z3) if the payment is shall be - made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the requires payment of the claimTax Claim as a condition precedent to initiation of the contest, Lessee the Charterer shall advance to such Tax Indemnitee the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest Tax Claim on an interest-free basis and with shall indemnify the Tax Indemnitee on an After-Tax Basis for any adverse tax consequences resulting from such interest-free advance. In no additional net after-tax cost event shall any Tax Indemnitee be required, or the Charterer permitted, to contest any such Tax Claim unless: (i) no Charter Event of - Default shall have occurred and be continuing (unless the Charterer shall have provided security reasonably satisfactory to such Tax Indemnitee securing the Charterer's performance of its obligations under this Section 12.2) and (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (Cii) such Indemnitee shall have reasonably determined that the action to -- be taken will not result in any material risk of forfeitureimposition of criminal penalties or any substantial danger of sale, sale forfeiture or loss of the Aircraft (unless Lessee shall have made provisions to protect Vessel or any interest therein. If requested by the interests of any such Indemnitee)Charterer and if permitted by applicable law, (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such Charterer may contest, the amount of the Tax being contestedat its own expense, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax Claim. In any contest controlled by a Tax Indemnitee, such Tax Indemnitee will consult in good faith with the Charterer and its counsel and submit to the Charterer and its counsel for review and comment, and consider in good faith any and all suggestions made with respect to, any document or other item to be submitted to a taxing authority or a court in connection with the contest and will permit the Charterer to participate in a reasonable manner in the conduct of the contest. Upon the written request of the affected Tax Indemnitee, the Charterer will advise such Tax Indemnitee of the status of any contest being conducted by the Charterer pursuant to this Section 12.2(e). No Tax Indemnitee shall offer, accept or enter into a settlement or other compromise with respect to any Tax Claim being contested pursuant to this Section 12.2(e), or forego or terminate any such contest, without the prior written consent of the Charterer (which consent shall not be permitted unreasonably withheld based solely on the merits of the Tax Claim). Any refusal or failure by a Tax Indemnitee to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity contest a Tax Claim when required under this Section 6(b12.2(e), and any settlement or compromise or other discontinuance by a Tax Indemnitee of a contest of a Tax Claim required by this Section 12.2(e) without the prior written consent of the Charterer when required under this Section 12.2(e), shall release and discharge the Charterer from any obligation to indemnify such Tax Indemnitee for such Tax Claim, and such Tax Indemnitee shall pay to the Charterer promptly any amounts previously paid or advanced by the Charterer pursuant to this Agreement with respect to such Tax Claim (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously other than amounts paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at costs and expenses of the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxcontest).
Appears in 1 contract
Sources: Participation Agreement (Mobil Corp)
Contests. If a any written claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to Section 19.2, such Tax Indemnitee shall promptly give notify Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action together with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for all documentation received from a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunderauthority. If requested by Lessee in writing a written request to such Tax Indemnitee within 30 thirty (30) days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Tax Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding control the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) contest (including, without limitation, by pursuit of appeals and administrative procedures) except if the Tax in issue from such claim or any action regarding any appeal set of an adverse determination with respect similar or related claims is less than $10,000 in which case the Tax Indemnitee may in good faith control the contest or elect to any claim) or settle or compromise any claim without have Lessee control the prior written consent same. If Lessee controls the contest, such Tax Indemnitee shall provide to Lessee and its representatives a power of attorney in form reasonably satisfactory to Lessee (except and such other documentation as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required Lessee may reasonably request to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to behalf of such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Tax Indemnitee. Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated consult in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Tax Indemnitee with respect to the contest of such claim (and all directly related claims and claims based on but the outcome decisions regarding what actions to be taken shall be made by Lessee in its sole judgment. In addition, Lessee shall keep the Tax Indemnitee reasonably informed as to the progress of such claim) shall terminate, subject to this Section 6(b)(iv)the contest, and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such provide the Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority in connection with respect to a refund of such Taxclaim or the contest thereof. Notwithstanding anything contained in this Section 6(b)19.2, an a Tax Indemnitee will shall not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim or permit Lessee to contest any claim and may settle any contest without Lessee's the consent of Lessee if such Tax Indemnitee (A) shall waive its right to indemnity under this Section 6(b), 19.2 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of for such claim) Tax, and (B) shall pay to Lessee any amount of Tax previously paid or advanced by Lessee pursuant to this Section 6(b19.2 other than the costs and expenses of the contest of such claim paid by the Lessee, together with interest thereon at the underpayment rate, as defined in Section 6621 of the Code. Notwithstanding any of the foregoing in this Section 19.2(e), Lessee may, at any time and with notice to the Lessor, contest the property taxes, ad valorem taxes and other Impositions for which the Lessee has an obligation to indemnify any Tax Indemnitee hereunder. Each Tax Indemnitee shall, upon the Lessee's request provide to Lessee and its representatives a power of attorney in form reasonably satisfactory to Lessee and such other documentation as Lessee may reasonably request to permit Lessee to conduct any such contest. If any Tax Indemnitee or any Affiliate thereof shall obtain a refund (including by way of credit) of all or any part of any Tax with respect to which the Lessee shall have paid on behalf of such Tax Indemnitee or reimbursed such Tax Indemnitee, then such Tax Indemnitee shall, so long as no Lease Event of Default shall have occurred and be continuing, pay to the Lessee any such refund (including any applicable interest received with respect to such Tax, plus interest at the rate refund or that would have been payable by the relevant taxing authority received with respect to such refund but for a refund counterclaim or other claim not indemnified by Lessee hereunder) plus any tax savings realized by such Tax Indemnitee as a result of a payment pursuant to this sentence (it being understood that the calculation of such Taxtax savings shall take into account any additional income taxes incurred by such Tax Indemnitee as a result of the receipt or accrual of such refund). The Tax Indemnitee shall make any payments to the Lessee under this Section 19.2(e) within ten (10) days of the receipt of such refund.
Appears in 1 contract
Sources: Lease Agreement (Griffin Capital Essential Asset REIT II, Inc.)
Contests. If For purposes of this Agreement, a “Contest” is any audit, court proceeding or other dispute with respect to any Tax matter that affects the Company or any of its Subsidiaries or the Additional Assets or the Excluded Assets, as the case may be. Unless Parent has previously received written claim is made against an Indemnitee or if notice from Seller of the existence of such Contest, Parent shall give written notice to Seller of the existence of any proceeding is commenced against an Indemnitee Contest relating to a Tax matter that may result in Seller being required to make a Tax Indemnity Payment under this Article VIII within ten (including a 10) days from the receipt by Parent of any written notice of such proceeding) for Taxes as Contest but Parent’s failure to which Lessee could be liable for payment or indemnity hereunderprovide Seller with such notice within such time shall not relieve Seller of any liability hereunder except to the extent Seller is prejudiced thereby. Unless Seller previously has received written notice from Parent of the existence of such Contest, or if an Indemnitee makes a determination that Seller shall give written notice to Parent of the existence of any Contest relating to a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee matter that may result in Parent being required to make a Tax Indemnity Payment under this Article VIII within ten (10) days from the receipt by Seller of any written notice in writing of such claim Contest but Seller’s failure to provide Parent with such notice within such time frame shall not relieve Parent of any liability hereunder except to the extent Parent is prejudiced thereby. Parent and Seller agree, in each case at no cost to the other party, to cooperate with the other and the other’s representatives in a prompt and timely manner in connection with any Contest. Such cooperation shall include making available to the other party, during normal business hours, all books, records, returns, documents, files, other information (including working papers and schedules), officers or employees (without substantial interruption of employment) or other relevant information necessary or useful in connection with any Contest requiring any such books, records and files, provided, however, that the failure Seller shall not be obligated to provide such notice shall not affect Lessee's obligations hereunder information relating to Taxes of Seller’s consolidated or combined tax group except to the Owner Participant unless extent such failure information relates solely to the Company or its Subsidiaries and neither Seller nor Parent shall materially adversely affect be obligated to make any disclosure that reasonably could, as a result of such disclosure, have the effect of causing the waiver of any legal privilege. Seller shall, at its election, have the right to contest such claim) represent the Company’s or any of its Subsidiaries’, as the case may be, interests in any Contest relating to a Tax matter for which it may be required to make a Tax Indemnity Payment, to employ counsel of its choice at its expense, and shall not take any action with respect to such claim or Tax without control the consent of Lessee for 30 days following the receipt conduct of such notice by Lessee; Contest, including settlement or other disposition thereof, provided, however, that, if such Indemnitee that Parent shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice have the right to contest consult with Seller regarding any such Contest that may affect the Company or (II) its Subsidiaries for any periods ending after the failure to so pay would result in criminal penalties Closing Date at Parent’s own expense and (B) provided, further, that any settlement or other disposition of any such Indemnitee shall act in connection Contest may only be with paying the Tax in the manner that is the least prejudicial to the pursuit consent of the contest)Parent, which consent will not be unreasonably withheld. In addition, such Indemnitee shall (provided that Lessee Purchaser shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee right to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination Contest with respect to any claim) or settle or compromise any claim without Tax matter arising in a period after the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit Closing Date for which Lessee would the Seller does not have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee liability pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxArticle VIII.
Appears in 1 contract
Contests. If a written any claim is shall be made against an Indemnitee any Indemnified Party or if any proceeding is shall be commenced against an Indemnitee any Indemnified Party (including a written notice of such proceeding) for Taxes any Tax as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 5.04, such Indemnitee Indemnified Party shall promptly give within thirty (30) days notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within thirty (30) days shall not affect Lesseealter such Indemnified Party's obligations hereunder rights under this Section 5.04 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Indemnitee Indemnified Party shall be required by law or regulation to take action prior to the end of such 30-day period, such Indemnitee shall, Indemnified Party shall in such notice to the Lessee, so inform the Lessee, and such Indemnitee Indemnified Party shall not take no any action with respect to such claim, proceeding or Tax without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an Indemnitee 10) days after the receipt of such notice by the Lessee unless the Indemnified Party shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that Participation Agreement Proprietary & Confidential The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimbe entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticenotice from the Indemnified Party (or such shorter period as the Indemnified Party has notified the Lessee is required by law or regulation for such Indemnified Party to commence such contest), to request in writing that such Indemnitee shallIndemnified Party contest the imposition of such Tax, at the expense Lessee's sole cost and expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofIndemnified Party for which the Lessee has not agreed to indemnify such Indemnified Party, (Yy) such contest must be pursued in the name of the Indemnified Party, but can be pursued independently from any other proceeding involving a Tax liability of such Indemnified Party for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Indemnified Party or (Zz) if the payment is madeIndemnified Party so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled described in clause (y), if the Indemnified Party reasonably determines that such contest by the Lessee could have an Indemniteeadverse impact on the business or operations of the Indemnified Party, such Indemnitee Indemnified Party may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Tax ultimately determined to be due by reason of such claim. In all other claims requested to be contested by the Lessee, such Indemnified Party shall consult control the contest of such claim. In no event shall the Lessee be permitted to contest (or the Indemnified Party be required to contest) any claim (A) if such Indemnified Party provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or could involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Encumbrance) on any Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Indemnified Party in good faith regarding respect to such risk, (B) if an Event of Default has occurred and is continuing under Section 6.01(a), (h) or (i) unless the manner Lessee shall have posted and maintained by a bond or other security satisfactory to the relevant Indemnified Party in respect of contesting the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Indemnitee Indemnified Party on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Indemnitee shall Indemnified Party may incur in connection with contesting such claimTax including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Indemnified Party an interest-interest- free basis and advance in an amount equal to the Tax that the Indemnified Party is required to pay (with no additional net after-tax cost costs to such Indemnitee Indemnified Party). In addition for Indemnified Party controlled contests and claims contested in the name of such Indemnified Party in a public forum, no contest shall be required (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (CA) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Indemnified Party with respect to any period for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv)5.04) is at least exceeds $3,000. Notwithstanding the foregoing25,000 and (B) unless, if requested by such Indemnified Party, the Lessee shall have provided to such Indemnified Party an opinion of independent tax counsel selected by such Indemnified Party and reasonably acceptable to the Lessee that a reasonable basis exists to contest such claim. In no event shall an Indemnified Party be required to appeal an adverse judicial determination to the United States Supreme Court. Participation Agreement Proprietary & Confidential The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions are to be taken shall be made by the controlling party in its sole judgment, provided, however, that if the Indemnified Party is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Indemnified Party rejects such settlement offer, then the amount for which the Lessee will be required to indemnify such Indemnified Party with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any Indemnitee reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Indemnified Party shall, at the Lessee's sole cost and expense, supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 5.04(d); provided, however, that such Indemnified Party shall releasenot be required to provide to the Lessee copies of its tax returns or any other information, waive, documentation or materials that it deems to be confidential or proprietary. No Indemnified Party shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b5.04 (and with respect to which contest is required under this Section 5.04) without the prior written permission consent of the Lessee, Lessee's obligation unless such Indemnified Party waives its right to indemnify be indemnified under this Section 5.04 with respect to such Indemnitee claim. Notwithstanding anything contained herein to the contrary, an Indemnified Party will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Indemnified Party shall waive its right to indemnification under this Section 5.04 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver.)
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.5, or if any Tax Indemnitee shall reasonably and in good faith determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within thirty (30) days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within thirty (30) days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any Impositions) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, in such notice to the Lessee, so inform Lessee, the Lessee and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Lessee unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such ten (10) day period. The Lessee shall be entitled for a period of thirty (30-day ) days from receipt of such notice from such Tax Indemnitee (or such shorter period as such Tax Indemnitee has notified the Lessee is required by law or regulation for such Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee contest the Imposition, at the Lessee's sole expense. If (x) such contest can be pursued in the name of the Lessee and independently from any other proceeding involving an Imposition of such Tax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee or (y) such Tax Indemnitee so requests, then the Lessee shall be permitted to control the contest of such claim, provided that in the case of any such contest, if such Tax Indemnitee determines reasonably and in good faith that such contest by the Lessee could have a material adverse impact on the business or operations of such Tax Indemnitee (A)(I) and in the failure to so pay the Tax would result in substantial penalties case of clause (unless immediately reimbursed by x), will not have a material adverse impact on Lessee) and provides a written explanation to the act Lessee of paying such determination, such Tax Indemnitee may elect to control or reassert control of the contest and reasonably pursue resolution of such contest, and provided that by taking control of the contest, the Lessee acknowledges that it is solely responsible for the Imposition ultimately determined to be due by reason of such contest, and provided, further, that in determining the application of clause (x) above, each Tax would Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not prejudice obligated to indemnify hereunder, so that the right Lessee can control the contest of the former. In all other claims relating to Impositions requested to be contested by the Lessee, such Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. Notwithstanding anything to the contrary contained herein, in no event shall the Lessee be permitted to pursue or continue any contest (IIor such Tax Indemnitee be required to pursue or continue any contest) of any Imposition or claim thereof through any action, suit or proceeding (A) if such Tax Indemnitee provides the failure Lessee with a legal opinion of independent counsel reasonably acceptable to so pay would result the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability on any Tax Indemnitee or will involve a material risk of imposition of civil liability on any Tax Indemnitee or the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Property Lien) on the Property or any part thereof or any interference with the payment of Rent unless, with respect to civil liability only, the Lessee shall have posted a bond or other security reasonably satisfactory to the relevant Tax Indemnitees in criminal penalties and respect of such risk, (B) such Indemnitee shall act in connection with paying if a Lease Default or Lease Event of Default has occurred and is continuing, (C) unless the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating pay and shall pay to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Lessee (including on demand and on an After Tax Basis all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition or claim thereof, including all reasonable legal, accounting and investigatory fees and disbursements as well as the Impositions which are the subject of such contest to the extent the contest is unsuccessful, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Imposition prior to the commencement of contest, unless the Lessee shall provide to such contest on Tax Indemnitee an interest-free basis advance in an amount equal to the Imposition that the Tax Indemnitee is so required to pay on an After Tax Basis and with (E) prior to commencing any contest, the Lessee shall have acknowledged in writing its liability for the Imposition (if and to the extent that the Tax Indemnitee or Lessee, as the case may be, shall not prevail in the contest in respect of the Imposition). In addition, no additional net after-tax cost contest of any Imposition shall be required: (A) unless the amount of the potential indemnities (taking into account all similar or logically related claims that have been or are likely to be raised in any audit involving such Tax Indemnitees for which the Lessee may be liable to pay an indemnity under this Section 13.5(b)) exceeds $50,000 and (B) unless, if requested by such Tax Indemnitee, the Lessee shall have provided to such Tax Indemnitee at the Lessee's sole expense, an opinion of independent counsel selected by the Lessee and reasonably acceptable to the Tax Indemnitee that a reasonable basis exists to contest such Imposition (or, in the case of an appeal from an adverse judicial determination, that there is substantial authority for a reversal or favorable modification of such decision of such appeal). In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting and controlling the contest of an Imposition shall consult in good faith with the other party and its counsel with respect to such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), contest (Cor claim for refund) such Indemnitee shall have reasonably determined that but the action decisions regarding what actions are to be taken will not result with respect to such contest shall be made by the controlling party in its sole judgment. In addition, the party controlling the contest shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant Governmental Authority to the controlling party thereof, relating to such contest. Each Tax Indemnitee shall, at the Lessee's sole expense, supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any material risk of forfeitureaction, sale suit or loss proceeding to the extent permitted by this Section 13.5(b) so long as such information or documents are not, in the reasonable judgment of the Aircraft (unless Lessee shall have made provisions Tax Indemnitee, confidential information or documents. Notwithstanding anything in this Section 13.5(b) to protect the interests of any such Indemnitee)contrary, (D) so long as no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security continuing, no Tax Indemnitee shall enter into any settlement or other compromise or fail to appeal an adverse determination with respect to any claim for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit Imposition for which Lessee would have an indemnity obligation it is entitled to be indemnified under this Section 6(b)(iv)) 13.5 (and with respect to which contest is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to required under this Section 6(b13.5(b)) without the prior written permission consent of Lesseethe Lessee (which shall not be unreasonably withheld or delayed), Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.5 with respect to such claim pursuant to the next paragraph. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest or continue to contest (and the Lessee shall not be permitted to contest or continue to contest) a claim with respect to any Imposition and shall be permitted to settle or commence any such claim without the consent of Lessee if (i) such Tax Indemnitee shall waive its right to indemnification under this Section 13.5 with respect to such claim (and all directly related claims and claims based on any claim with respect to such year or any other taxable year the outcome contest of which is materially adversely affected as a result of such claimwaiver) shall terminate, subject and the Tax Indemnitee returns to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to the Lessee any amount all amounts previously paid or advanced to such the Indemnitee with respect to the contest of such claimclaim or (ii) such Imposition is the sole result of a claim of a continuing and consistent nature, plus interest at the rate that would have which claim has previously been payable by resolved against the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right unless a change in law or facts has occurred since such prior adverse resolution and the Lessee provides an opinion of independent tax counsel reasonably satisfactory to indemnity under this Section 6(bthe Tax Indemnitee to the effect that it is more likely than not that such change in law or facts will result in a favorable resolution of the claim at issue), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could the Guarantor may have an indemnity obligation hereunderpursuant to this Section 13.4, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee or the Guarantor may have an indemnity obligation pursuant to this Section 13.4 may be payable, such Tax Indemnitee shall promptly give Lessee notice (and in any event, within fifteen (15) Business Days) notify the Guarantor in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Guarantor within fifteen (15) Business Days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.4 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of Lessee the Guarantor (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by Lesseethe Guarantor; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, shall in such notice to Lesseethe Guarantor, so inform Lesseethe Guarantor, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Guarantor (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Guarantor unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such ten (10) day period. The Guarantor shall be entitled for a period of thirty (30-day ) days from receipt of such notice from such Tax Indemnitee (or such shorter period as such Tax Indemnitee has notified the Guarantor is required by law or regulation for such Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee contest the imposition of such Tax, at the Guarantor's expense. If (x) such contest can be pursued in the name of the Guarantor or the Lessee and independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee and the Guarantor have not agreed to indemnify such Tax Indemnitee, (y) such contest must be pursued in the name of such Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee and the Guarantor have not agreed to indemnify such Tax Indemnitee or (z) such Tax Indemnitee so requests, then the Guarantor or such Lessee shall be permitted to control the contest of such claim, provided that in the case of a contest described in clause (y) if such Tax Indemnitee determines reasonably and in good faith that such contest by the Guarantor or the Lessee could have a material adverse impact on the business or operations of such Tax Indemnitee and provides a written explanation to the Guarantor of such determination, such Tax Indemnitee may elect to control or reassert control of the contest, and provided that the taking control by the Guarantor or the Lessee of any contest shall not alter the applicable Tax Indemnitee's rights to indemnification hereunder, and provided, further, that in determining the application of clauses (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lesseex) and (y) of the act preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee and the Guarantor indemnify hereunder from Taxes for which the Lessee and the Guarantor are not obligated to indemnify hereunder, so that the Guarantor can control the contest of paying the former. In all other claims requested to be contested by the Guarantor, such Tax would not prejudice Indemnitee shall control the right contest of such claim, acting through counsel selected by such Tax Indemnitee and reasonably acceptable to the Guarantor. In no event shall the Guarantor be permitted to contest (or such Tax Indemnitee be required to contest) any claim, (IIA) if such Tax Indemnitee provides the failure Guarantor with a legal opinion of counsel reasonably acceptable to so pay would result the Guarantor that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Property or any part thereof unless the Guarantor shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in criminal penalties and respect to such risk, (B) if a Lease Event of Default has occurred and is continuing unless the Guarantor shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such Indemnitee shall act claim and any and all expenses for which the Guarantor or the Lessee is responsible hereunder reasonably foreseeable in connection with paying the Tax in contest of such claim, (C) unless the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee Guarantor shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating pay and shall pay, to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticeTax Indemnitee on written demand all reasonable, such Indemnitee shall, at the expense of Lessee (including all reasonable documented out-of-pocket costs costs, losses and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements and (Bif applicable) reasonable, allocable internal overhead costs determined in accordance with normal bank operating procedures, or (D) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of contest, unless the Guarantor shall provide to such contest on Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that such Tax Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition, for contests controlled by such Tax Indemnitee and claims contested in the name of such Tax Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with in any audit involving any or all such Tax Indemnitees with respect to any period for which the Guarantor or the Lessee may be liable to pay an indemnity under this Section 13.4(b)) exceeds (1) with respect to the Lessor, $25,000 and (2) with respect to any Tax Indemnitee other than the Lessor, $75,000 and (B) unless, if requested by such Tax Indemnitee, the Guarantor shall have provided to such Tax Indemnitee an opinion of counsel selected by the Guarantor (which may be in-house counsel) (except, in the case of income taxes indemnified hereunder, in which case such opinion shall be an opinion of independent tax counsel selected by the Guarantor and reasonably acceptable to such Tax Indemnitee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other Aircraft leased party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the Owner Participant to Lessee or raised controlling party in any other audit its sole judgment; provided, however, that if such Tax Indemnitee is the controlling party and the Guarantor recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer, then the amount for which a Lessee and the Guarantor will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted provided that any Tax Indemnitee shall be entitled to reject any indemnity payment it would otherwise be entitled to hereunder if such Tax Indemnitee reasonably determines that accepting such offer would have an unindemnified impact on such Tax Indemnitee and provided further that no Tax Indemnitee may reject any such indemnity payment if the Guarantor agrees to pay to such Tax Indemnitee the amount of such unindemnified impact, as reasonably determined by such Tax Indemnitee. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof, provided, however, that such obligation shall not obligate any Tax Indemnitee to disclose its tax returns or information or documentation unrelated to such claim or contest. Each Tax Indemnitee shall, at the expense of the Lessee and the Guarantor, supply the Lessee or the Guarantor with such information and documents reasonably requested by the Lessee or the Guarantor as are necessary or advisable for such Person to participate in any action, suit or proceeding to the extent permitted by this Section 13.4(b); provided, however, that such Tax Indemnitee shall not be required to provide to such Lessee or the Guarantor copies of its tax returns or any other information, documentation, or materials that it deems to be confidential or proprietary. Notwithstanding anything in this Section 13.4(b) to the contrary, no Tax Indemnitee shall enter into any settlement or other compromise or fail to appeal an adverse ruling with respect to any claim which is entitled to be indemnified under this Section 6(b)(iv)) 13.4 (and with respect to which contest is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to required under this Section 6(b13.4(b)) without the prior written permission consent of Lesseethe Guarantor, Lesseeunless such Tax Indemnitee waives its right to be indemnified under this Section 13.4 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee shall not be required to contest (and neither the Lessee nor the Guarantor shall be permitted to contest in any judicial forum if such contest could, in a Tax Indemnitee's obligation reasonable judgment, be materially adverse to indemnify it) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall have waived its right to indemnification under this Section 13.4 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome precluded or materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax Indemnitee shall promptly give within thirty (30) days notify the Lessee notice in writing of such claim (provided, however, that the failure to provide such notice so notify the Lessee within thirty (30) days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.5 except to the Owner Participant unless extent such failure shall materially adversely affect precludes the right ability to conduct a contest such claimof any Impositions) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law Applicable Law to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Lessee unless such Tax Indemnitee shall be entitled required by Applicable Law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-ten (10) day period if (A)(I) period, provided, further, however, that the failure to so pay of the Tax would result Indemnitee to give notice referred to in substantial penalties (unless immediately reimbursed by this sentence shall not diminish Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than 's obligations hereunder except to the extent necessary in order to contest the that such failure precludes Lessee from contesting such claim. The Lessee shall be entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, notice from such Tax Indemnitee shall(or such shorter period as such Tax Indemnitee has notified the Lessee is required by Applicable Law for such Tax Indemnitee to commence such contest) to request in writing that such Tax Indemnitee contest the imposition of such Tax, at the expense Lessee's sole cost and expense. If (i) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yii) such contest must be pursued in the name of such Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Ziii) if such Tax Indemnitee so requests, then the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided, that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled described in clause (ii), if such Tax Indemnitee reasonably determines that such contest by the Lessee could have an adverse impact on the business or operations of such Tax Indemnitee, such Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, the Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim. In all other claims requested to be contested by the Lessee, such Tax Indemnitee shall consult control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or such Tax Indemnitee required to contest) any claim (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or could involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Property Lien of the type described in good faith regarding clause (a), (b), (g) or (h) of the manner definition thereof) on the Property or any part of contesting any thereof unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if a CAA Event of Default, Unwind Event or Lease Event of Default has occurred and is continuing unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in its sole discretion in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of contest, unless the Lessee shall provide to such contest on Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Tax Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition, for Tax Indemnitee controlled contests and claims contested in the name of such Tax Indemnitee in a public forum, no contest shall be required unless: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee with respect to any period for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.5(b)) exceeds $50,000, (B) if requested by such Tax Indemnitee, the Lessee shall have provided to such Tax Indemnitee an opinion of counsel selected by the Lessee (except, in the case of income taxes indemnified hereunder, in which case such opinion shall be an opinion of independent tax counsel selected by such Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim (or, in the case of an appeal of an adverse determination, an opinion of such counsel to the effect that there is at least $3,000. Notwithstanding substantial authority for the foregoing, if any position asserted in such appeal) and (C) Lessee shall have acknowledged in writing to the Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee its obligation to pay the costs and expenses thereof and to indemnify such Tax Indemnitee pursuant to this Section 6(b) without 13.5 for the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, Taxes subject to this Section 6(b)(iv)the proposed contest, and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.contest is
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within thirty (30) days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within thirty (30) days shall not affect Lessee's obligations hereunder alter such Tax Indemnitee’s rights under this Section 13.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any Impositions) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform Lessee, the Lessee and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-ten (10) day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimbe entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticenotice from such Tax Indemnitee (or such shorter period as such Tax Indemnitee has notified the Lessee is required by law or regulation for such Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee’s expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of such Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if such Tax Indemnitee so requests, then the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in clause (y), if such Tax Indemnitee shall consult with Lessee determines reasonably and in good faith regarding that such contest by the manner of contesting such claim and shall keep Lessee reasonably informed regarding could have a material adverse impact on the progress business or operations of such Tax Indemnitee and provides a written explanation to the Lessee of such determination, such Tax Indemnitee may elect to control or reassert control of the contest. An , and provided that by taking control of the contest, the Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) above, each Tax Indemnitee shall not fail to take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the Tandem Health Care of Ohio, Inc. Participation Agreement contest of the former. In all other claims requested to be contested by the Lessee, such Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or such Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action expressly required by this Section 6(b)(ivsuit or proceeding involves a risk of imposition of criminal liability or material civil liability on such Tax Indemnitee or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Property Lien) (includingon the Properties or any other Lessee Collateral or any part thereof unless, without limitation, any action regarding any appeal of an adverse determination with respect to any claimcivil liability only, the Lessee shall have agreed in writing to be responsible for such risk or shall have posted a bond or other security against such risk satisfactory to such Indemnitee, (B) or settle or compromise any claim without if an Event of Default under the prior written consent of Lessee Lease has occurred and is continuing, (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of contest, unless the Lessee shall provide to such contest on Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition for Tax Indemnitee controlled contests and claims contested in the name of such Tax Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with in any audit involving any or all of the other Aircraft leased by the Owner Participant such Tax Indemnitees with respect to Lessee or raised in any other audit period for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.5(b)) exceeds $100,000 and (B) unless, if requested by such Tax Indemnitee, the Lessee shall have provided to such Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions are to be taken shall be made by the controlling party in its sole judgment, provided, however, that if such Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) and reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall, at least $3,000the Lessee’s expense, cooperate with and supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 13.5(b). Notwithstanding anything in this Section 13.5(b) to the foregoingTandem Health Care of Ohio, if any Inc. Participation Agreement contrary, no Tax Indemnitee shall release, waive, enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.5 (and with respect to which contest is required under this Section 13.5(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.5 with respect to such claim pursuant to the next paragraph. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest or continue to contest (and the Lessee shall not be permitted to contest or continue to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 13.5 with respect to such claim (and all directly related claims and claims based on any claim with respect to such year or any other taxable year the outcome contest of which is materially adversely affected as a result of such claimwaiver) shall terminate, subject and returns to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to the Lessee any amount all amounts previously paid or advanced to such the Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 1 contract
Contests. (a) If a written claim is shall be made against an Indemnitee or by any Taxing Authority that, if any proceeding is commenced against an Indemnitee successful, would result in the indemnification of a party (including a written notice of such proceedingthe "Tax Indemnified Party") for Taxes as to which Lessee could be liable for payment or indemnity hereunderunder this Article VII, or if an Indemnitee makes a determination that a the Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee Indemnified Party shall promptly give Lessee notice notify the party (the "Tax Indemnifying Party") obligated under this Article VII to indemnify the Tax Indemnified Party in writing of such fact; provided, however, that a failure to give such notice shall not affect the Tax Indemnified Party's right to indemnification under this Article VII except to the extent, if any, that, but for such failure, the Tax Indemnifying Party could have avoided all or a portion of the Tax liability in question. Such notice shall contain factual information (to the extent known to the Tax Indemnified Party) describing the asserted Tax liability in reasonable detail and shall include copies of any notice or other document received from any Taxing Authority in respect of such asserted Tax liability.
(b) The Tax Indemnifying Party shall determine the method of any contest of any claim under Section 7.04(a) and shall control the conduct thereof. If the contest or appeal of such claim requires that all or a portion of the contested Taxes (or a bond in respect thereof) be paid as a jurisdictional prerequisite, the Tax Indemnifying Party shall advance to the Tax Indemnified Party the amount of such Taxes or fee for such bond (but in no event shall the amount of such advance exceed the Tax Indemnifying Party's liability under this Agreement). The Tax Indemnified Party shall take such action in connection with contesting such claim as the Tax Indemnifying Party shall request in writing from time to time, including the selection of counsel and experts and the execution of powers of attorney; provided, however, that the failure to provide such notice Tax Indemnified Party shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing take any such action, unless, within 30 calendar days after its delivery of the notice required by Section 7.04(a) to the Tax Indemnifying Party (or such earlier date that any payment of Taxes is due by the Tax Indemnified Party but in no event earlier than five calendar days after the Tax Indemnifying Party's receipt of such notice), the Tax Indemnifying Party requests that such Indemnitee shall, at claim be contested and agrees to pay to or on behalf of the expense of Lessee (including Tax Indemnified Party any and all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated expenses incurred by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur Tax Indemnified Party in connection with contesting such claim, (B) if such contest including, without limitation, the reasonable fees of outside advisors, attorneys and accountants. The Tax Indemnified Party shall involve the not be required to make any payment of such claim for at least 30 calendar days (or such shorter period as may be required by applicable Law) after the claimdelivery of the notice required by this subsection, Lessee shall advance the amount thereof plus (timely give to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee Tax Indemnifying Party any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have information reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder requested by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect Indemnifying Party relating to such claim, plus interest at and otherwise shall cooperate with the rate that would have been payable by Tax Indemnifying Party in order to contest effectively any such claim.
(c) Subject to the relevant taxing authority provisions of Section 7.04(b), the Tax Indemnified Party shall enter into a settlement of such contest with the applicable Taxing Authority or prosecute such contest to a determination in a court, all as the Tax Indemnifying Party may request.
(d) Promptly after the extent of the liability of the Tax Indemnified Party with respect to a refund claim shall be established by the final judgment or decree of such Tax. a court or a final and binding settlement with a Taxing Authority having jurisdiction thereof, the Tax Indemnifying Party shall pay the Tax Indemnified Party the amount of any Taxes to which the Tax Indemnified Party may become entitled by reason of the provisions of this Section 7.04.
(e) Notwithstanding anything contained to the contrary in this Section 6(b)Article VII, an Indemnitee will any interest, penalties, fines, assessments or additions to any Tax resulting from or attributable to the failure of the Tax Indemnified Party to act in a timely manner, including in filing Tax Returns, responding to Tax audits or other inquiries or making payments shall not be required to contest the imposition of any Tax indemnifiable hereunder and shall be permitted to settle or compromise the sole responsibility of the Tax Indemnified Party.
(f) The indemnification provided in this Article VII shall be the sole remedy for any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under in respect of Taxes. In the event of a conflict between the provisions of this Section 6(b), with respect to such Tax (Article VII and any directly related claim and any claim other provisions of this Agreement, the outcome provisions of which is determined based upon the outcome of such claim) and (B) this Article VII shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxcontrol.
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could the Representative may have an indemnity obligation hereunderpursuant to this Section 13.5, or if any Tax Indemnitee shall determine that any Imposition to which the Representative may have an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax Indemnitee shall promptly give Lessee notice (and in any event, within 30 days) notify the Representative in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Representative within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any Impositions) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of Lessee the Representative (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by Lesseethe Representative; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to Lesseethe Representative, so inform Lessee, the Representative and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Representative (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Representative unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period. The Representative shall be entitled for a period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such notice, notice from such Tax Indemnitee shall, at (or such shorter period as such Tax Indemnitee has notified the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants feesis required by law or regulation for such Tax Indemnitee to commence such contest), to request in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees writing that such Tax Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by Representative's expense. If (x) such contest can be pursued in the relevant taxing authority with respect to name of the Representative and independently from any other proceeding involving a refund Tax liability of such Tax.Tax Indemnitee for which the Representative has not agreed to indemnify such Tax Indemnitee, (y) such contest
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Indemnitee or if any proceeding is shall be commenced against an any Indemnitee (including a written notice of such proceeding) for any Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to SECTION 8.1, or if any Indemnitee shall determine that any Taxes as to which Lessee may have an indemnity obligation pursuant to SECTION 8.1 may be payable, such Indemnitee shall promptly give notify Lessee. Lessee notice in writing of shall be entitled, at its expense, acting through counsel reasonably acceptable to such claim (providedIndemnitee, howeverto participate in, and, to the extent that Lessee desires to, assume and control the defense thereof; PROVIDED, HOWEVER, that the failure to provide such notice Lessee shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay assume and control the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies defense of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticeaction, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, suit or proceeding if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that (A) Lessee is not able to provide such Indemnitee with a legal opinion of counsel reasonably acceptable to such Indemnitee that such action, suit or proceeding does not involve (x) a risk of imposition of criminal liability or (y) any material risk of material civil liability on such Indemnitee and will not involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Encumbrance) on the Equipment, the Trust Estate or any part thereof, unless, in the case of this CLAUSE (y), Lessee contemporaneously with such opinion shall have posted a bond or other security satisfactory to the relevant Indemnitee in respect to such risk, (B) the control of such action, suit or proceeding would involve a bona fide conflict of interest, (C) such proceeding involves Claims not fully indemnified by Lessee which Lessee and the Indemnitee have been unable to sever from the indemnified claim(s), (D) a Default or Lease Event of Default has occurred and is able to separate the contested issue continuing, (E) such action, suit or issues from other issues arising in the same administrative proceeding involves matters which extend beyond or judicial proceeding that are unrelated to the transactions transaction contemplated by the Operative Documents without, in and if determined adversely could be materially detrimental to the good faith judgment interests of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit notwithstanding indemnification by Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (AF) Lessee shall not have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur acknowledged in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for writing its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify fully such Indemnitee with in respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminateaction, subject to this Section 6(b)(iv), suit or proceeding. The Indemnitee may participate in a reasonable manner at its own expense and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee with its own counsel in any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced proceeding conducted by Lessee pursuant to this Section 6(b) in accordance with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxforegoing.
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could the Lessees may have an indemnity obligation hereunderpursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly give Lessee notice in writing of such claim (notify Concord. Concord shall be entitled, at its expense, to participate in, and, to the extent that Concord desires to, assume and control the defense thereof; provided, however, that Concord shall have acknowledged in writing its and each Lessee's obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the failure to provide such notice contest is unsuccessful; and, provided further, that Concord shall not affect Lessee's obligations hereunder be entitled to assume and control the defense of any such action, suit or proceeding (but the Tax Indemnitee shall then contest, at the sole cost and expense of Concord and such other Lessees, on behalf of Concord with representatives reasonably satisfactory to Concord) if and to the Owner Participant extent that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless a Lessee shall have posted a bond or other security reasonably satisfactory to the relevant Tax Indemnitees in respect to such failure risk, (B) such proceeding involves Claims not fully indemnified by the Lessees which Concord and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessees or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee not indemnified by the Lessees. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall materially adversely affect be required to conduct such contest only if Concord shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the right Tax Indemnitee and reasonably satisfactory to Concord stating that a reasonable basis exists to contest such claim) and shall not take any action with respect to such claim or Tax without (ii) in the consent case of Lessee for 30 days following the receipt an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such notice by Lessee; counsel to the effect that such appeal is more likely than not to be successful, provided, however, that, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may event be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in appeal an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals determination to the United States Supreme Court. If The Tax Indemnitee may participate in a reasonable manner at its own expense and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising with its own counsel in the same administrative or judicial any proceeding that are unrelated to the transactions contemplated conducted by the Operative Documents without, Concord in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult accordance with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
Appears in 1 contract
Sources: Master Agreement (Concord Efs Inc)
Contests. Tenant shall have the right, after at least ten (10) days prior written notice to Landlord (or such shorter period as may be required at Law in order to preserve the right to do so), to contest the amount or validity of any Imposition or Law or lien by appropriate proceedings conducted in good faith and with due diligence, at its sole cost and expense. If Tenant has not yet made the Minimum Investment, or deposited into escrow under terms and conditions reasonably satisfactory to Landlord the amount by which the Minimum Investment then exceeds the Investment, then, Tenant shall furnish to Landlord security reasonably satisfactory to Landlord against any claim, loss, liability or expense incurred as a written claim result of such nonpayment or delay therein. In the event of any such contest, if the final determination thereof is made against an Indemnitee adverse to Tenant, then Tenant shall pay fully the amounts involved in such contest, together with any penalties, fines, interests, costs and expenses that may have accrued thereon or if that may result from any proceeding such contest by Tenant, and after such payment by Tenant, Landlord will promptly return to Tenant such security as Landlord shall have received in connection with such contest, unless such adverse determination results directly from or is commenced against an Indemnitee (including a otherwise directly related to Landlord's failure to comply with its obligations under this Lease, or Landlord's negligence or misconduct, in which event, Landlord shall immediately after written notice of such proceeding) adverse determination return such deposit to Tenant. Landlord shall join in any such proceeding if any Law now or hereafter in effect shall require that such proceedings be brought by and/or in the name of Landlord or any owner of the Private Parcel. Neither Landlord nor the Private Parcel shall be subjected to any liability for Taxes as to which Lessee could be liable for the payment or indemnity hereunderof any costs, fees, including attorneys' fees, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, expenses in connection with any such Indemnitee shall promptly give Lessee notice in writing of such claim proceeding (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder except to the Owner Participant unless extent that such adverse determination results from or is otherwise related to Landlord's failure shall materially adversely affect the right to contest such claim) and shall not take any action tocomply with respect to such claim its obligations under this Lease, or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee Landlord's negligence or misconduct). Tenant shall be entitled to pay the Tax claimed and ▇▇▇ for a any refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding Imposition and shall provide to Lessee such information penalties or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteeinterest thereon, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee which shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claimbeen paid by Tenant or paid by Landlord, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee for which Landlord shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxfully reimbursed.
Appears in 1 contract
Sources: Parcel Lease (Premier Parks Inc)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly give notify the Lessee. The Lessee notice in writing of such claim (shall be entitled, at its expense, to participate in, and, to the extent that the Lessee desires to, assume and control the defense thereof; provided, however, that the failure Lessee shall have acknowledged in writing its obligation to provide fully indemnify such notice Tax Indemnitee in respect of such action, suit or proceeding if the contest is unsuccessful; and, provided further, that the Lessee shall not affect be entitled to assume and control the defense of any such action, suit or proceeding (but the Tax Indemnitee shall then contest, at the sole cost and expense of the Lessee's obligations hereunder , on behalf of the Lessee with representatives reasonably satisfactory to the Owner Participant Lessee) if and to the extent that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of civil liability in excess of $1,000,000 on such Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Encumbrance) on any Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such failure risk, (B) such proceeding involves Claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall materially adversely affect be required to conduct such contest only if the right Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Lessee stating that a reasonable basis exists to contest such claim) and shall not take any action with respect to such claim or Tax without (ii) in the consent case of Lessee for 30 days following the receipt an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such notice by Lessee; counsel to the effect that such appeal is more likely than not to be successful, provided, however, that, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may event be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in appeal an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals determination to the United States Supreme Court. If The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lessee in accordance with the foregoing. Each Tax Indemnitee shall at the Lessee's expense supply the Lessee with such information and documents in such Tax Indemnitee's possession as are reasonably requested by the Lessee and are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required permitted by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of 7.4. Unless an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is begun unless Lessee has provided security for its obligations hereunder by advancing entitled to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation indemnified under this Section 6(b)(iv)) is at least $3,0007.4 without the prior written consent of the Lessee, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 with respect to such Claim. Notwithstanding anything contained herein to the foregoingcontrary, (a) a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if any such Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant waive its right to indemnification under this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee 7.4 with respect to such claim (and all directly any related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at other taxable years the rate that would have been payable by the relevant taxing authority with respect to contest of which is precluded as a refund result of such Tax. Notwithstanding anything contained in this Section 6(b), an waiver) and (b) no Tax Indemnitee will not shall be required to contest any claim if the imposition subject matter thereof shall be of any Tax a continuing nature and shall be permitted to settle or compromise any claim without Lesseehave previously been decided adversely, unless there has been a change in law which in the opinion of Tax Indemnitee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim counsel creates substantial authority for the outcome of which is determined based upon the outcome success of such claim) contest. Each Tax Indemnitee and (B) the Lessee shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) consult in good faith with respect to such Tax, plus interest at each other regarding the rate that would have been payable by the relevant taxing authority with respect to a refund conduct of such Taxcontest controlled by either.
Appears in 1 contract
Sources: Master Agreement (Aaron Rents Inc)
Contests. If a written claim is any Claim in respect of an Imposition shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within thirty (30) days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within thirty (30) days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this Section 13.5 except to the Owner Participant unless extent such failure shall materially adversely affect precludes or prejudices the right ability to contest such claimImposition) and shall not take any action with respect to such claim Claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such Claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, in such notice to the Lessee, so inform Lessee, the Lessee and such Tax Indemnitee shall not take no any action with respect to such Claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Lessee unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such ten (lO) day period. The Lessee shall be entitled for a period of thirty (30-day ) days from receipt of such notice from such Tax Indemnitee (or such shorter period if as such Tax Indemnitee has notified the Lessee is required by law or regulation for such Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee contest the Imposition at the Lessee's expense. If (A)(Ix) such contest can be pursued in the failure name of the Lessee and independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (y) such contest must be pursued in the name of such Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee or (z) such Tax Indemnitee so pay requests, then the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice Lessee shall have the right to control the contest or (II) the failure to so pay would result in criminal penalties and (B) of such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In additionClaim, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled described in clause (y), if such Tax Indemnitee obtains and provides the Lessee with the reasonable good faith opinion of such Tax Indemnitee's counsel that such contest by an the Lessee could have a material adverse impact on the business or operations of such Tax Indemnitee, including an explanation to the Lessee of such determination, such Tax Indemnitee may elect to control or reassert control of the contest, and provided that by taking control of the contest, the Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such Claim, and provided, further, that in determining the application of clauses (x) and (y) above, each Tax Indemnitee shall consult with take any and all reasonable steps to segregate Claims for any Taxes for which the Lessee in good faith regarding indemnifies hereunder from Taxes for which the manner Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of contesting the former. In all other Claims requested to be contested by the Lessee, such claim and Tax Indemnitee shall keep Lessee reasonably informed regarding control the progress contest of such contestClaim, acting through counsel reasonably acceptable to the Lessee. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in In no event shall an Indemnitee the Lessee be required permitted to pursue any contest (or such Tax Indemnitee required to permit Lessee to pursue any contest) unless any Claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a reasonable risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Property or any part thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing, (C) unless the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of contest, unless the Lessee shall provide to such contest on Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition for Tax Indemnitee controlled contests and Claims contested in the name of such Tax Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims Claims that have been or could be raised with in any audit involving any or all such Tax Indemnitees with respect to any period for which the Lessee may be liable to pay an indemnity under this Sec 13.5(b)) exceeds $250,000 and (B) unless, if requested by such Tax Indemnitee, the Lessee shall have provided to such Tax Indemnitee an opinion of the other Aircraft leased counsel selected by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim (which may be indemnifiable in-house counsel) (except, in the case of income taxes indemnified hereunder, in which case such opinion shall be an opinion of independent tax counsel selected by such Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such Claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such Claim for Taxes (or Claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgment, provided, however, that if such Tax Indemnitee is the controlling party and the Lessee pursuant to this Section 6(b) without recommends the written permission acceptance of Lessee, Lessee's obligation a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such claim offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the non-controlling party with a copy of (or appropriate excerpts from) and reports or Claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such Claim or the contest thereof. Each Tax Indemnitee shall, at the Lessee's expense, supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 13.5(b). Notwithstanding anything in this Section 13.5(b) to the contrary, no Tax Indemnitee shall enter into any settlement or other compromise or fail to appeal an adverse ruling with respect to any Claim which is entitled to be indemnified under this Section 13.5 (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject with respect to which contest is required under this Section 6(b)(iv13.5(b)) without the prior written consent of the Lessee, and subject unless such Tax Indemnitee waives its right to be indemnified under this Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee 13.5 with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxClaim. Notwithstanding anything contained in this Section 6(b)herein to the contrary, an a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a Claim with respect to the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Tax Indemnitee (A) shall waive its right to indemnity indemnification under this Section 6(b), 13.5 with respect to such Tax Claim (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) Claim with respect to such Tax, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to contest of which is materially adversely affected as a refund result of such Taxwaiver).
Appears in 1 contract
Sources: Participation Agreement (Alumax Inc)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this SECTION 13.5, or if any Tax Indemnitee shall determine that any Imposition to which the Lessee may have an indemnity obligation pursuant to this SECTION 13.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within 30 days) notify the Lessee notice in writing of such claim (provided, however, PROVIDED that the failure to provide such notice so notify the Lessee within 30 days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this SECTION 13.5 except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 days following after the receipt of such notice by the Lessee; providedPROVIDED, howeverHOWEVER, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so (it being understood that an 10 days after the receipt of such notice by the Lessee unless such Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies be entitled for a period of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its from receipt of such noticenotice from such Tax Indemnitee (or such shorter period as such Tax Indemnitee has notified the Lessee is required by law or regulation for such Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee's expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of such Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if such Tax Indemnitee so requests, then the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim, PROVIDED that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in CLAUSE (y), if such Tax Indemnitee shall consult with Lessee determines reasonably and in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting such Tax Indemnitee and provides a written explanation to the Lessee of such determination, such Tax Indemnitee may elect to control or reassert control of the contest, and PROVIDED, that by taking control of the contest, the Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and PROVIDED, FURTHER, that in determining the application of CLAUSES (x) and (y) of the preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, such Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or such Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing unless the Lessee shall have posted and maintained a bond or other security satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of contest, unless the Lessee shall provide to such contest on Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Tax Indemnitee). In addition for Tax Indemnitee controlled contests and claims contested in the name of such Tax Indemnitee in a public forum, no contest shall be required: (DA) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised in any audit involving such Tax Indemnitee with respect to any period for which the Lessee may be liable to pay an indemnity under this SECTION 13.5(b)) exceeds $75,000 or all (B) unless, if requested by such Tax Indemnitee, the Lessee shall have provided to such Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel) (except, in the case of income taxes indemnified hereunder which shall be an opinion of independent tax counsel selected by such Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgement, PROVIDED, HOWEVER, that if such Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the other Aircraft leased contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) any reports or claims issued by the Owner Participant relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall at the Lessee's expense supply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or raised advisable for the Lessee to participate in any other audit for which Lessee would have an indemnity obligation under action, suit or proceeding to the extent permitted by this Section 6(b)(ivSECTION 13.5(b)) is at least $3,000. Notwithstanding anything in this SECTION 13.5(b) to the foregoingcontrary, if any no Tax Indemnitee shall release, waive, enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant indemnified under this SECTION 13.5 (and with respect to which contest is required under this Section 6(bSECTION 13.5(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this SECTION 13.5 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification from Lessee under this SECTION 13.5 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claim, plus interest at year or any other taxable year the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver).
Appears in 1 contract
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceedinga) for Taxes as to which Lessee could be liable for payment or indemnity hereunderAfter the Closing Date, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee Buyer shall promptly give Lessee notice notify Seller in writing of any proposed assessment, the commencement of any audit or court proceedings or of any demand or claim on a Tax Indemnitee which, if determined adversely to the taxpayer or after the lapse of time, would be grounds for indemnification by Seller under Section 10.3 (each such claim (providedassessment, howeveraudit, court proceeding, demand or claim, a “Contest”); provided that the failure so to provide such notice notify Seller shall not affect Lessee's obligations hereunder relieve Seller of any liability that it may have to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; providedIndemnitee hereunder, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than except to the extent necessary that Seller demonstrates that it is actually prejudiced thereby. Such notice (a “Tax Claim”) shall contain factual information (to the extent known to Buyer) describing the asserted Tax liability in order to contest the claim) furnish Lessee with reasonable detail and shall include copies of any requests for information notice or other document received from any taxing authority relating in respect of any such asserted Tax liability.
(b) In the case of any Contest that relates to a taxable period ending on or prior to the Closing Date, Seller shall have the right, at its expense and through counsel of its own choosing, to control the conduct of such Taxes with respect to which Lessee may be required Contest; provided that (i) Seller does not dispute its obligation to indemnify hereunderthe Tax Indemnitees for the asserted liability, (ii) Seller shall consult with the Buyer regarding any such Contest and shall allow Buyer to participate in any such proceeding and (iii) no settlement or other disposition of any claim for Tax which would adversely affect any Tax Indemnitee in any taxable period ending after the Closing Date in any manner or to any extent (including, but not limited to, the imposition of income tax deficiencies, the reduction of asset basis or cost adjustments and the reduction of loss or credit carryovers) shall be agreed to without Buyer’s prior written consent, such consent not to be unreasonably withheld or delayed, unless Buyer agrees to indemnify the Seller for any increase in Taxes resulting from a failure to provide consent. If requested by Lessee in writing within 30 days Seller elects not to direct the Contest, Buyer or the Company may pay, compromise, or contest such asserted liability.
(c) In the case of a Contest that relates to a taxable period beginning before the Closing Date and ending after the Closing Date, Buyer shall have the right, at its receipt expense and through counsel of its own choosing, to control the conduct of such noticeContest; provided that (i) Buyer shall consult with Seller regarding any such Contest and shall allow Seller to participate in any such proceeding and (ii) no settlement or other disposition of any claim for Taxes which would adversely affect Seller in such taxable periods or subsequent taxable periods shall be agreed to without Seller’s prior written consent, such Indemnitee shallconsent not to be unreasonably withheld or delayed, at unless Seller agrees to indemnify the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), Buyer for any increase in good faith contest (or, if permitted by applicable law, allow Lessee Taxes resulting from a failure to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceedingprovide consent. If requested to do so by LesseeExcept as provided above, the Indemnitee Buyer shall appeal any adverse administrative or judicial decision, except that have the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee right to control the conduct of any such proceeding and shall provide to Lessee such information or data that is Contest in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination its sole discretion with respect to any claimother Tax matter.
(d) or settle Seller, Buyer and the Company agree to cooperate in the defense against or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxContest.
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.4, or if any Tax Indemnitee shall determine that any Imposition for which Lessee may have an indemnity obligation pursuant to this Section 13.4 may be payable, such Tax Indemnitee shall promptly give (and in any event, within twenty (20) days) notify Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify Lessee within twenty (20) days shall not affect Lessee's obligations hereunder alter such Tax Indemnitee’s rights under this Section 13.4, except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by Lessee▇▇▇▇▇▇; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, shall in such notice to Lessee, so inform Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by ▇▇▇▇▇▇, unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-ten (10) day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimbe entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at ▇▇▇▇▇▇’s expense. If (x) such contest can be pursued in the expense name of Lessee (including all reasonable out-of-pocket costs ▇▇▇▇▇▇ and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which ▇▇▇▇▇▇ has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which ▇▇▇▇▇▇ has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee then Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim; provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in any of clause (x), such (y) or (z) if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by ▇▇▇▇▇▇ could have a material adverse impact on the manner business or operations of contesting the Tax Indemnitee and provides a written explanation to Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, ▇▇▇▇▇▇ acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of the preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which ▇▇▇▇▇▇ indemnifies hereunder from Taxes for which ▇▇▇▇▇▇ is not obligated to indemnify hereunder, so that ▇▇▇▇▇▇ can control the contest of the former. In all other claims requested to be contested by ▇▇▇▇▇▇, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to ▇▇▇▇▇▇. In no event shall Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides Lessee with a legal opinion of independent counsel that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Leased Property or any part of any thereof unless Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default is continuing, unless ▇▇▇▇▇▇ shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep Lessee any and all expenses for which ▇▇▇▇▇▇ is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) Lessee shall have agreed to pay and shall pay to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition, including all reasonable legal, accounting and investigatory fees and disbursements as well as the Impositions which are the subject of such claim to the extent the contest is unsuccessful, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs (including Taxes) to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.4(b)) is at least exceeds $3,000. Notwithstanding the foregoing50,000 and (B) unless, if requested by the Tax Indemnitee, ▇▇▇▇▇▇ shall have provided to the Tax Indemnitee an opinion of counsel selected by ▇▇▇▇▇▇ (which may be in-house counsel, except, in the case of income taxes indemnified hereunder, which opinion shall be that of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgment; provided, however, that if the Tax Indemnitee is the controlling party and Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the non-controlling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releasesupply Lessee with such information and documents reasonably requested by ▇▇▇▇▇▇ as are necessary or advisable for Lessee to participate in any action, waivesuit or proceeding to the extent permitted by this Section 13.4(b), and ▇▇▇▇▇▇ shall promptly reimburse such Indemnitee for the reasonable out-of-pocket expenses of supplying such information and documents. Except during the continuation of an Event of Default where Lessee and/or Guarantor shall have failed to provide indemnity and, if requested by a Tax Indemnitee, collateral security, both in form, substance and in such amounts reasonably satisfactory to each Tax Indemnitee, no Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.4 (and with respect to which contest is required under this Section 13.4(b)) without the prior written permission consent of Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.4 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if (i) such Tax Indemnitee shall waive its right to indemnification under this Section 13.4 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claimyear or any other taxable year, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claimwaiver) or (ii) such Tax is the sole result of a claim of a continuing and (B) shall pay to Lessee any amount consistent nature, which claim has previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by resolved against the relevant taxing authority with respect Tax Indemnitee (unless a change in law or facts has occurred since such prior adverse resolution and Lessee provides an opinion of independent tax counsel to the effect it is more likely than not that such change in law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.4, or if any Tax Indemnitee shall determine that any Imposition for which the Lessee may have an indemnity obligation pursuant to this Section 13.4 may be payable, such Tax Indemnitee shall promptly give (and in any event, within twenty (20) days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within twenty (20) days shall not affect Lessee's obligations hereunder alter such Tax Indemnitee’s rights under this Section 13.4, except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Lessee, unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-ten (10) day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimbe entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee’s expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim; provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in any of clause (x), such (y) or (z) above, if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee would have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, L▇▇▇▇▇ acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of this sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of independent counsel that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Leased Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing, unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition, including all reasonable legal, accounting and investigatory fees and disbursements as well as the Impositions which are the subject of such claim to the extent the contest is unsuccessful, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs (including Taxes) to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.4(b)) is at least exceeds $3,000. Notwithstanding the foregoing50,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel, except, in the case of income taxes indemnified hereunder, which opinion shall be that of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgment; provided, however, that if the Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the non-controlling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releasesupply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waivesuit or proceeding to the extent permitted by this Section 13.4(b), and the Lessee shall promptly reimburse such Indemnitee for the reasonable out-of-pocket expenses of supplying such information and documents. Except during the occurrence of an Event of Default where Lessee and/or the Guarantors shall have failed to provide indemnity and, if requested by a Tax Indemnitee, collateral security, both in form, substance and in such amounts reasonably satisfactory to each Tax Indemnitee, no Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.4 (and with respect to which contest is required under this Section 13.4(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.4 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if (i) such Tax Indemnitee shall waive its right to indemnification under this Section 13.4 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claimyear or any other taxable year, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claimwaiver) or (ii) such Tax is the sole result of a claim of a continuing and (B) shall pay to Lessee any amount consistent nature, which claim has previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by resolved against the relevant taxing authority with respect Tax Indemnitee (unless a change in law or facts has occurred since such prior adverse resolution and Lessee provides an opinion of independent tax counsel to the effect it is more likely than not that such change in law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
Appears in 1 contract
Sources: Participation Agreement (Regeneron Pharmaceuticals, Inc.)
Contests. If If, after the Closing Date, any Buyer Indemnified Party receives any notice, letter, correspondence, claim or decree relating to Taxes of the Company or its Subsidiaries from any taxing authority (a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice “Tax Notice”) and, upon receipt of such proceeding) Tax Notice, believes it has suffered or potentially could suffer any Taxes or Adverse Consequences for Taxes as which it would be entitled to which Lessee could be liable for payment or indemnity hereunderindemnification under Section 5.8(a), Buyer shall, or if an Indemnitee makes a determination that a shall cause the Company or its Subsidiaries to, promptly deliver such Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall promptly give Lessee notice in writing of such claim (Notice to Seller; provided, however, that the failure of Buyer to provide such notice the Tax Notice to Seller shall not affect Lessee's obligations hereunder the indemnification rights of any Buyer Indemnified Party pursuant to Section 5.8(a) unless Seller is prejudiced by the Owner Participant unless failure to deliver such failure Tax Notice (which prejudice shall materially adversely affect include, but not be limited to, the inability of Buyer or Seller, as the case may be, to defend the matter(s) set forth in such Tax Notice). Seller shall have the right to contest handle, defend, conduct and control any Tax audit or other proceeding that relates to such claim) Tax Notice and shall not take any action with respect provide written notice to Buyer of its election to defend such claim Tax audit or Tax without the consent proceeding within fifteen (15) business days of Lessee for 30 days following the its receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lesseerelevant Tax Notice, and such Indemnitee Buyer shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice have the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is participate in such Indemnitee's control Tax audit or possession that is reasonably necessary to conduct such contestproceeding at its own expense. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and Seller shall keep Lessee reasonably Buyer informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests substantive aspects of any such Indemnitee), (D) no Lease Event of Default Tax audit or proceeding. Seller shall also have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing right to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee such Tax audit or proceeding that it has elected to control pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminatepreceding sentence, subject to this Section 6(b)(iv)Buyer’s consent, and subject to Section 6(b)(iii), such Indemnitee which consent shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.unreasonably
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.4, or if any Tax Indemnitee shall determine that any Imposition for which the Lessee may have an indemnity obligation pursuant to this Section 13.4 may be payable, such Tax Indemnitee shall promptly give (and in any event, within twenty (20) days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within twenty (20) days shall not affect Lessee's obligations hereunder alter such Tax Indemnitee’s rights under this Section 13.4, except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Lessee, unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-ten (10) day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that The Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimbe entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee’s expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim; provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in any of clause (x), such (y) or (z) above, if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, Lessee acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of this sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of independent counsel that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Leased Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing, unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition, including all reasonable legal, accounting and investigatory fees and disbursements as well as the Impositions which are the subject of such claim to the extent the contest is unsuccessful, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs (including Taxes) to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.4(b)) is at least exceeds $3,000. Notwithstanding the foregoing50,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel, except, in the case of income taxes indemnified hereunder, which opinion shall be that of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgment; provided, however, that if the Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the non-controlling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releasesupply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waivesuit or proceeding to the extent permitted by this Section 13.4(b), and the Lessee shall promptly reimburse such Indemnitee for the reasonable out-of-pocket expenses of supplying such information and documents. Except during the occurrence of an Event of Default where Lessee and/or the Guarantors shall have failed to provide indemnity and, if requested by a Tax Indemnitee, collateral security, both in form, substance and in such amounts reasonably satisfactory to each Tax Indemnitee, no Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.4 (and with respect to which contest is required under this Section 13.4(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.4 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if (i) such Tax Indemnitee shall waive its right to indemnification under this Section 13.4 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claimyear or any other taxable year, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claimwaiver) or (ii) such Tax is the sole result of a claim of a continuing and (B) shall pay to Lessee any amount consistent nature, which claim has previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by resolved against the relevant taxing authority with respect Tax Indemnitee (unless a change in law or facts has occurred since such prior adverse resolution and Lessee provides an opinion of independent tax counsel to the effect it is more likely than not that such change in law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
Appears in 1 contract
Sources: Participation Agreement (Regeneron Pharmaceuticals, Inc.)
Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as with respect to which Lessee could is or may be liable for a payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall will promptly give Lessee notice in writing of such claim (claim; provided, however, that such Indemnitee's failure to give notice will not relieve Lessee of its obligations hereunder, except to the extent the failure to provide give such notice shall precludes a contest of such claim in the manner contemplated herein. So long as (a) a contest of such Taxes does not affect Lessee's obligations hereunder involve any danger of the sale, forfeiture or loss of the Aircraft or any interest therein, (b) Lessee has provided the relevant Indemnitee with an opinion of independent tax counsel acceptable to the Owner Participant unless such failure shall materially adversely affect the right to contest Indemnitee that a meritorious basis exists for contesting such claim, (c) and shall not take any action with respect to Lessee has made adequate reserves for such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, thatTaxes or, if such Indemnitee shall be required by law to take action prior to the end of such 30-day periodrelevant Indemnitee, such Indemnitee shall, in such notice to Lessee, so inform an adequate bond has been posted by Lessee, and (d) Lessee has acknowledged in writing its obligation to indemnify for such Taxes, then such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by at Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), 's written request will in good faith faith, with due diligence and at Lessee's sole cost and expense, contest (or, if permitted by applicable lawLaw, allow permit Lessee to contestcontest in the name of such Indemnitee) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes Taxes. If such contest is to be initiated by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is madeof, using reasonable efforts to obtain and the claiming of a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitationfor, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claimTaxes, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest relevant Indemnitee sufficient funds (on an interest-free basis basis) to make such payments and with no additional net after-tax cost to shall indemnify such Indemnitee (and such Indemnitee shall promptly pay to Lessee for any net realized tax benefits consequences resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such of funds. Although the relevant Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated may consult in good faith by such Indemnitee for reasonable expenses, and (E) in with Lessee concerning the case conduct of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii)contest, such Indemnitee shall repay control the conduct of all proceedings relating to Lessee any amount previously paid such contest which is brought by or advanced to on behalf of such Indemnitee with respect to such claim, plus interest Indemnitee. Any contest initiated hereunder may be settled or discontinued at the rate any time provided that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of shall have waived any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim indemnification for the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxTaxes being contested.
Appears in 1 contract
Sources: Lease Agreement (Pan Am Corp /Fl/)
Contests. (a) If an adjustment shall be proposed by the IRS in writing that, if sustained, would result in a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) Loss for Taxes as to which Lessee Old Dominion could be liable for payment or indemnity hereunderrequired to indemnify the Owner Participant under this Agreement, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee shall the Owner Participant agrees promptly give Lessee notice to notify Old Dominion in writing of such claim (providedproposed adjustment; PROVIDED, howeverHOWEVER, that the any failure to provide such notice shall not affect Lessee's obligations hereunder relieve Old Dominion of any obligation to indemnify the Owner Participant hereunder unless such failure shall materially adversely affect effectively precludes the right to initiation or continuation of the contest of such claimadjustment. If (i) and shall not take any action with respect to such claim or Tax without the consent of Lessee for within 30 days following the after receipt of such notice by Lessee; providedOld Dominion shall request in writing that the Owner Participant contest such proposed adjustment and (ii) the Owner Participant shall have received, howeverat the commencement of the contest and before each level of judicial proceeding, thatan opinion of Independent Tax Counsel, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shalleffect that there is a Reasonable Basis for contesting the proposed adjustment (and, in the case of an appeal from an adverse judicial determination, an opinion from such notice counsel to Lessee, so inform Lesseethe effect that it is more likely than not) that such adverse determination will be reversed or substantially modified upon appeal in a manner favorable to the taxpayer) (which opinions (a) will be furnished at Old Dominion's expense, and (b) the Owner Participant will assist in good faith and with diligence in promptly procuring), the Owner Participant shall contest such Indemnitee shall take no action for as long as it is legally able to do so (it being understood proposed adjustment; PROVIDED, HOWEVER, that an Indemnitee shall be entitled to the Owner Participant may, in its sole discretion, either pay the Tax claimed tax proposed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of proposed adjustment in any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticepermissible forum considering, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees)however, in good faith contest (or, if permitted by applicable law, allow Lessee such requests as Old Dominion may make concerning the most appropriate forum in which to contest) through appropriate administrative and judicial proceedings proceed. Notwithstanding the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lesseeforegoing, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee Owner Participant shall not be required to pursue any appeals such contest unless (v) Old Dominion shall have agreed in writing to pay and shall be paying on demand all reasonable costs and expenses that the United States Supreme Court. If Owner Participant shall incur in connection with contesting such proposed adjustment, including, without limitation, reasonable attorneys', accountants' and investigatory fees and disbursements; (w) the proposed adjustment that could result in a payment by Old Dominion (if a lump-sum amount were to be paid pursuant to Section 4(b)(2) hereof) in connection with such proposed adjustment, taking into account the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated amount of all similar and logically related adjustments with respect to the transactions contemplated by the Operative Documents without, that could be raised in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct an audit of any such proceeding other taxable year of the Owner Participant (including any future taxable year) not barred by the statute of limitations shall be at least $100,000 and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination at least $250,000 with respect to any claimjudicial appeal; (x) or settle or compromise any claim without the prior written consent no Event of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee Default shall have agreed occurred and be continuing; and (y) if the Owner Participant shall determine to pay such Indemnitee on demand all reasonable out-of-pocket costs the tax proposed and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim▇▇▇ for a refund, (B) if such contest shall involve the payment of the claim, Lessee Old Dominion shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest Owner Participant on an interest-free basis and with no additional net after-tax cost to the Owner Participant sufficient funds to pay the tax and interest, penalties and additions to tax payable with respect thereto (to the extent such Indemnitee amount is indemnified against pursuant to Section 4 hereof (an "Advance")); and PROVIDED, HOWEVER, that the Owner Participant shall not be required to pursue any appeal to the United States Supreme Court.
(b) In connection with any proposed adjustment described in Section 6(a) hereof, the Owner Participant shall not make payment of such Indemnitee proposed adjustment for at least 30 days after the giving of written notice of such proposed adjustment to Old Dominion (except that if the Owner Participant shall promptly pay be required by law or regulation to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making take action with respect to any such paymentadjustment prior to the end of such 30-day period, the Owner Participant shall, in such notice to Old Dominion, so inform Old Dominion, and the Owner Participant shall not take any action with respect to such adjustment without the consent of Old Dominion (not unreasonably to be withheld) before the date on which the Owner Participant shall be required by law or regulation to take action). Notwithstanding anything herein to the contrary, (C) such Indemnitee the Owner Participant shall have reasonably determined that full control over any contest pursuant to this Section 6 and shall determine in its sole discretion the action nature of all actions to be taken will not result in connection with any material risk of forfeiturecontest including the right to pursue or forego any administrative proceedings; PROVIDED, sale or loss of HOWEVER, that the Aircraft (unless Lessee Owner Participant shall have made provisions to protect the interests of any contest such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing claim at the time administrative level if the contest is begun unless Lessee has provided security for its obligations hereunder by advancing failure to such Indemnitee before proceeding with such contestdo so would preclude the availability of all judicial remedies; and PROVIDED, FURTHER, the amount of the Tax being contested, plus any interest and penalties and an amount estimated Owner Participant shall consult in good faith with Old Dominion and its counsel in the contest of any claim and shall keep such counsel reasonably informed regarding such contest. Nothing contained in this Section 6 shall require the Owner Participant to contest a proposed adjustment that it would otherwise be required to contest pursuant to this Section 6 if the Owner Participant (i) waives the payment by Old Dominion of any amount that might otherwise be payable by Old Dominion under this Agreement by way of indemnity in respect of such Indemnitee for reasonable expenses, proposed adjustment and (Eii) in the case of a contest that is being pursued by an Indemnitee, the aggregate pays to Old Dominion any amount of taxes, interest, penalties and additions to tax previously paid or advanced by Old Dominion pursuant to this Agreement with respect to such proposed adjustment, plus interest on such amounts at the claim IRS rate for refunds, payable from the date of payment by Old Dominion to the Owner Participant of such amounts to (together with but excluding) the amount date of all similar or logically related claims that have been or could be raised with any or all repayment of the other Aircraft leased such amounts by the Owner Participant to Lessee Old Dominion; PROVIDED, HOWEVER, that if the Owner Participant settles a proposed adjustment such that Old Dominion is precluded as a matter of law from initiating or raised in continuing a contest hereunder of any adjustment for any other audit for which Lessee would taxable period, the Owner Participant shall be deemed to have an indemnity obligation waived the payment by Old Dominion under this Section 6(b)(iv)Agreement of any indemnity amounts in respect of such other adjustment.
(c) is at least $3,000. Notwithstanding If Old Dominion shall have requested the foregoing, if any Indemnitee Owner Participant to contest a proposed adjustment as above provided and shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to have duly complied with all the terms of this Section 6(b6, Old Dominion's liability for indemnification due under Section 4 hereof shall, at Old Dominion's election (except for amounts provided for under Section 6(a) without hereof), be deferred until Final Determination of the written permission liability of Lesseethe Owner Participant. At such time, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on Old Dominion shall become obligated for the payment of any indemnification due under Section 4 hereof resulting from the outcome of such claim) contest. Upon payment in full by Old Dominion of any indemnity amounts due under this Agreement, the Owner Participant shall terminate, subject become obligated to this Section 6(b)(iv), and subject refund to Section 6(b)(iii), such Indemnitee shall repay Old Dominion an amount equal to Lessee any amount previously paid received as a refund of income taxes by the Owner Participant or advanced credited to such Indemnitee with respect to such claim, plus interest at the rate Owner Participant (including any refund or credit that would have been payable received but for a counterclaim or other claim not indemnified by the relevant taxing authority with respect Old Dominion hereunder) that is fairly attributable to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle advances or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity payments made by Old Dominion under this Section 6(b)Agreement, together with respect to such Tax any interest received (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable received) by the relevant taxing authority with respect to a Owner Participant on such refund (after reduction by any tax incurred by Owner Participant by reason of the receipt or accrual of such Taxinterest), plus an amount equal to any tax benefit realized by the Owner Participant as the result of the payment contemplated by this sentence. Such obligations of the Owner Participant and Old Dominion will first be set off against each other, and any difference owing by either party shall be paid within 30 days after such Final Determination but not prior to the date determined in accordance with Section 4(b) hereof.
Appears in 1 contract
Sources: Tax Indemnity Agreement (Old Dominion Electric Cooperative)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this SECTION 13.5, or if any Tax Indemnitee shall determine that any Imposition for which Lessee may have an indemnity obligation pursuant to this SECTION 13.5 may be payable, such Tax Indemnitee shall promptly give (and in any event, within thirty (30) days) notify Lessee notice in writing of such claim (provided, however, PROVIDED that the failure to provide such notice so notify Lessee within thirty (30) days shall not affect Lesseealter such Tax Indemnitee's obligations hereunder rights under this SECTION 13.5, except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by Lessee; providedPROVIDED, howeverHOWEVER, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day period, such Tax Indemnitee shall, shall in such notice to Lessee, so inform Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by Lessee, unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 3010-day period, in which case Tax Indemnitee shall promptly notify Lessee. Lessee shall be entitled for a period if of thirty (A)(I30) days from receipt of such notice from the Tax Indemnitee (or such shorter period as the Indemnitee has notified Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee contest such Imposition, at Lessee's expense. If (x) such contest can be pursued in the name of Lessee and independently from any other proceeding involving an Imposition for which Lessee has not agreed to indemnify such Tax Indemnitee, (y) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving an Imposition for which Lessee has not agreed to indemnify such Tax Indemnitee or (z) the failure Tax Indemnitee so requests, then Lessee shall be permitted to so pay control the Tax would result contest of such claim PROVIDED, that in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right order to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit take control of the contest). In addition, such Lessee must first acknowledge in writing its obligation to indemnify for the Imposition which is the subject of the contest if the outcome thereof is adverse, and PROVIDED, FURTHER, that in determining the application of CLAUSES (x) and (y) of the preceding sentence, each Tax Indemnitee shall (provided that Lessee shall have agreed take any and all reasonable steps to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of segregate claims for any requests Taxes for information from any taxing authority relating to such Taxes with respect to which Lessee may be required indemnifies hereunder from Taxes Lessee is not obligated to indemnify hereunder, so that Lessee can control the contest of the former. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including In all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If other claims requested to do so be contested by Lessee, the Tax Indemnitee shall appeal any adverse administrative control the contest of such claim, acting through counsel reasonably acceptable to Lessee. In no event shall Lessee be permitted to contest (or judicial decision, except that the Tax Indemnitee shall not be required to pursue contest) any appeals claim (A) if such Tax Indemnitee provides Lessee with a legal opinion of independent counsel that such action, suit or proceeding involves a material risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Leased Property or any part thereof unless Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the United States Supreme Court. If relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing, unless Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the extent relevant Tax Indemnitee in respect of the Indemnitee is able Impositions subject to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep all expenses for which Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) Lessee shall have agreed to pay and shall pay to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition, including all reasonable legal, accounting and investigatory fees and disbursements, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Impositions prior to the commencement of such contest on contest, unless Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Tax Indemnitee is required to pay (with no additional net after-tax cost costs (including Taxes) to such Indemnitee (Tax Indemnitee). In addition, for Tax Indemnitee-controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (unless Lessee shall have made provisions to protect A) unless, in the interests case of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contestan income tax, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Indemnitee for which Lessee may be liable to pay an indemnity under this SECTION 13.5) exceeds $50,000 and (B) unless, if requested by the Tax Indemnitee, Lessee shall have provided to the Indemnitee an opinion of counsel selected by Lessee (which may be in-house counsel, except that in the case of income taxes indemnified hereunder such opinion shall be that of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Impositions (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgment, PROVIDED, HOWEVER, that if the Tax Indemnitee is the controlling party and Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have an indemnity obligation under this Section 6(b)(iv)owed if such settlement offer had been accepted. In addition, the controlling party shall keep the noncontrolling party reasonably informed as to the progress of the contest, and shall provide the noncontrolling party with a copy of (or appropriate excerpts from) is at least $3,000any reports or claims issued by the relevant auditing agent or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Notwithstanding the foregoing, if any Each Tax Indemnitee shall releasesupply Lessee with such information and documents reasonably requested by Lessee as are necessary or advisable for Lessee to participate in any action, waivesuit or proceeding to the extent permitted by this SECTION 13.5(b), and Lessee shall promptly reimburse such Tax Indemnitee for the reasonable out-of-pocket expenses of supplying such information and documents. Unless an Event of Default shall have occurred and be continuing, no Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant indemnified under this SECTION 13.5 (and with respect to which contest is required under this Section 6(bSECTION 13.5(b)) without the prior written permission consent of LesseeLessee (such consent not to be unreasonably withheld), Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this SECTION 13.5 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and Lessee shall not be permitted to contest) a claim with respect to any Imposition if (i) such Tax Indemnitee shall waive its right to indemnification under this SECTION 13.5 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claimyear or any other taxable year, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claimwaiver) or (ii) such Imposition is the sole result of a claim of a continuing and (B) shall pay to Lessee any amount consistent nature, which claim has previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by resolved against the relevant taxing authority with respect Tax Indemnitee (unless a change in law or facts has occurred since such prior adverse resolution and Lessee provides an opinion of independent tax counsel to the effect that it is more likely than not that such change in law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
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Contests. If a written claim is made against an Indemnitee or if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunderAfter the Closing, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Indemnitee Covenant shall promptly give Lessee notice notify the Stockholders in writing of the proposed assessment or the commencement of any Tax audit or administrative or judicial proceeding or of any demand or claim on Covenant or the Company which, if determined adversely to the taxpayer or after the lapse of time, could be grounds for payment of Taxes or indemnification by the Stockholders under this Agreement. Such notice shall contain factual information (to the extent known to Covenant or the Company) describing the asserted Tax liability in reasonable detail and shall include copies of any notice or other document received from any taxing authority in respect of any such claim (asserted Tax liability. If Covenant fails to give the Stockholders prompt notice of an asserted Tax liability as required by this section, then the Stockholders shall not have any obligation to indemnify for any loss arising out of such asserted Tax liability under this Agreement; provided, however, that the failure to provide give such notice notification shall not affect Lessee's obligations the indemnification provided hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than except to the extent necessary in order to contest that the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt Indemnifying Party shall have been prejudiced as a result of such notice, such Indemnitee shall, at the expense of Lessee failure (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee Indemnifying Party shall not be required liable for any expenses incurred during the period in which the Indemnified Person failed to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of give such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contestnotice). In the case of a contest controlled by an IndemniteeTax audit or administrative or judicial proceeding (a "Contest") that relates to periods ending on or before the Closing Date, such Indemnitee the Stockholders shall consult with Lessee in good faith regarding have the manner of contesting such claim sole right to direct and shall keep Lessee reasonably informed regarding control the progress conduct of such contestContest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with With respect to any claim) Contest for any period beginning before the Closing Date and ending after the Closing Date, the Party which would bear the burden of the greater portion of the sum of the adjustments that may reasonably be anticipated for such period may elect to direct and control, through counsel of its own choosing, such Contest. If the Stockholders elect to direct any Contest or portion of a Contest, the Stockholders shall promptly notify Covenant of its intent to do so, and Covenant shall cooperate and shall cause the Company to fully cooperate in each phase of such Contest. If the Stockholders elect not to direct the Contest, Covenant shall assume control of such Contest and such Contest shall be subject to indemnification in accordance with Article V hereof. Covenant shall keep the Stockholder Representative reasonably informed of the status of such Contest. In any case, neither Covenant and the Company on the one hand, or the Stockholders, on the other hand, may settle or compromise any claim asserted liability without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv))the other affected party, which consent may not be unreasonably withheld, conditioned, or delayed. Notwithstanding the foregoingIn any event, any party may participate, at their own expense, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such TaxContest.
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to this Section 13.4, or if any Tax Indemnitee shall determine that any Imposition for which the Lessee may have an indemnity obligation pursuant to this Section 13.4 may be payable, such Tax Indemnitee shall promptly give (and in any event, within twenty (20) days) notify the Lessee notice in writing of such claim (provided, however, provided that the failure to provide such notice so notify the Lessee within twenty (20) days shall not affect Lessee's obligations hereunder alter such Tax Indemnitee’s rights under this Section 13.4, except to the Owner Participant unless extent such failure shall precludes or materially adversely affect affects the right ability to conduct a contest such claimof any indemnified Taxes) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by the Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such thirty (30-) day period, such Tax Indemnitee shall, shall in such notice to the Lessee, so inform the Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of the Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by the Lessee, unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-ten (10) day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)period. In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimbe entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified the Lessee is required by law or regulation for the Tax Indemnitee to commence such contest), to request in writing that such Tax Indemnitee shallcontest the imposition of such Tax, at the expense Lessee’s expense. If (x) such contest can be pursued in the name of the Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount independently from any other proceeding involving a Tax liability of such Taxes by (X) resisting payment thereofTax Indemnitee for which the Lessee has not agreed to indemnify such Tax Indemnitee, (Yy) such contest must be pursued in the name of the Tax Indemnitee, but can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee has not paying the same except under protest if protest is necessary and proper agreed to indemnify such Tax Indemnitee or (Zz) if the payment is madeTax Indemnitee so requests, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, then the Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee permitted to control the conduct contest of any such proceeding and shall provide to Lessee such information or data claim; provided that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemniteedescribed in any of clause (x), such (y) or (z) if the Tax Indemnitee shall consult with Lessee determines in good faith regarding that such contest by the manner Lessee could have a material adverse impact on the business or operations of contesting the Tax Indemnitee and provides a written explanation to the Lessee of such determination, the Tax Indemnitee may elect to control or reassert control of the contest, and provided, that by taking control of the contest, ▇▇▇▇▇▇ acknowledges that it is responsible for the Imposition ultimately determined to be due by reason of such claim, and provided, further, that in determining the application of clauses (x) and (y) of the preceding sentence, each Tax Indemnitee shall take any and all reasonable steps to segregate claims for any Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee is not obligated to indemnify hereunder, so that the Lessee can control the contest of the former. In all other claims requested to be contested by the Lessee, the Tax Indemnitee shall control the contest of such claim, acting through counsel reasonably acceptable to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of independent counsel that such action, suit or proceeding involves a risk of imposition of criminal liability or will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Leased Property or any part of any thereof unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default has occurred and is continuing, unless the Lessee shall have posted and maintained a bond or other security reasonably satisfactory to the relevant Tax Indemnitee in respect of the Taxes subject to such claim and shall keep any and all expenses for which the Lessee is responsible hereunder reasonably informed regarding foreseeable in connection with the progress contest of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) claim, (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contestC) unless (A) the Lessee shall have agreed to pay and shall pay (provided, that prior to the Base Term Commencement Date and pursuant to the terms and conditions in this Participation Agreement relating to Advances, Lessee shall request an Advance the proceeds of which shall be used to pay) to such Tax Indemnitee on demand all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall may incur in connection with contesting such claimImposition, including all reasonable legal, accounting and investigatory fees and disbursements as well as the Impositions which are the subject of such claim to the extent the contest is unsuccessful, or (BD) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid Tax prior to the commencement of such contest on contest, unless the Lessee shall provide to the Tax Indemnitee an interest-free basis and advance in an amount equal to the Imposition that the Indemnitee is required to pay (with no additional net after-tax cost costs (including Taxes) to such Tax Indemnitee). In addition for Tax Indemnitee (controlled contests and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that claims contested in the action to be taken will not result in any material risk of forfeiture, sale or loss name of the Aircraft Tax Indemnitee in a public forum, no contest shall be required: (A) unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and potential indemnity (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of taking into account all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit involving such Tax Indemnitee for which the Lessee would have may be liable to pay an indemnity obligation under this Section 6(b)(iv13.4(b)) is at least exceeds $3,000. Notwithstanding the foregoing50,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of counsel selected by the Lessee (which may be in-house counsel, except, in the case of income taxes indemnified hereunder, which opinion shall be that of independent tax counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a reasonable basis exists to contest such claim. In no event shall a Tax Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. The party conducting the contest shall consult in good faith with the other party and its counsel with respect to the contest of such claim for Taxes (or claim for refund) but the decisions regarding what actions to be taken shall be made by the controlling party in its sole judgment; provided, however, that if the Tax Indemnitee is the controlling party and the Lessee recommends the acceptance of a settlement offer made by the relevant Governmental Authority and such Tax Indemnitee rejects such settlement offer then the amount for which the Lessee will be required to indemnify such Tax Indemnitee with respect to the Taxes subject to such offer shall not exceed the amount which it would have owed if such settlement offer had been accepted. In addition, the controlling party shall keep the non-controlling party reasonably informed as to the progress of the contest, and shall provide the non-controlling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof. Each Tax Indemnitee shall releasesupply the Lessee with such information and documents reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, waivesuit or proceeding to the extent permitted by this Section 13.4(b), and the Lessee shall promptly reimburse such Indemnitee for the reasonable out-of-pocket expenses of supplying such information and documents. Except during the occurrence of an Event of Default where Lessee shall have failed to provide indemnity and, if requested by a Tax Indemnitee, collateral security (provided that no collateral security shall be required so long as the Lessee has an Investment Grade Rating), both in form, substance and in such amounts reasonably satisfactory to each Tax Indemnitee, no Tax Indemnitee shall enter into any settlement or other compromise or settle fail to appeal an adverse ruling with respect to any claim which may is entitled to be indemnifiable by Lessee pursuant to indemnified under this Section 6(b13.4 (and with respect to which contest is required under this Section 13.4(b)) without the prior written permission consent of the Lessee, Lessee's obligation unless such Tax Indemnitee waives its right to indemnify be indemnified under this Section 13.4 with respect to such claim. Notwithstanding anything contained herein to the contrary, a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if (i) such Tax Indemnitee shall waive its right to indemnification under this Section 13.4 with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee claim with respect to such claimyear or any other taxable year, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome materially adversely affected as a result of such claimwaiver) or (ii) such Tax is the sole result of a claim of a continuing and (B) shall pay to Lessee any amount consistent nature, which claim has previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by resolved against the relevant taxing authority with respect Tax Indemnitee (unless a change in law or facts has occurred since such prior adverse resolution and Lessee provides an opinion of independent tax counsel to the effect it is more likely than not that such change in law or facts will result in a refund favorable resolution of such Taxthe claim at issue).
Appears in 1 contract
Contests. If Notwithstanding anything to the contrary contained in this Agreement:
(a) After the Closing Date, Purchaser shall notify Seller in writing within ten (10) days of the date a written claim is made against an Indemnitee or threatened in writing by any Taxing Authority that, if any proceeding is commenced against an Indemnitee (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereundersuccessful, or if an Indemnitee makes a determination that a Tax is due for which Lessee could have may reasonably result in an indemnity obligation hereunder, such Indemnitee payment by Seller under Section 6.4 (a "Tax Claim"). Such notice shall promptly give Lessee notice contain factual information describing in writing reasonable detail the nature and basis of such claim (and the amount thereof, to the extent known, and shall include copies of any notice or other document received from any Taxing Authority in respect of any such asserted Tax liability. Failure by Purchaser to give such notice to the Seller shall not relieve the Seller of any liability that it may have on account of its indemnification obligation under this Article VI, except to the extent that Seller is materially and adversely prejudiced thereby in the defense of such Tax Claim; provided, however, that irrespective of whether the Seller is materially or adversely prejudiced, Seller shall be permitted to reduce any liability Seller may have on account of its indemnification obligation under this Article VI by the amount of its actual, out-of-pocket monetary damages that are caused by the Purchaser's failure to timely give the notice required pursuant to this Section 6.7(a).
(b) Seller will have the right, at its option, upon timely notice to Purchaser, to assume at its own expense control of any audit or other defense of any Tax Claim (other than a Tax Claim relating solely to Taxes of RSA SLISI for a Straddle Period, which as described below, the parties shall jointly control) with its own counsel, provided that Seller's notice acknowledges Seller's indemnification liability for such claim. Seller's right to control a Tax Claim will be limited to issues in respect of which amounts in dispute would be paid by Seller or for which Seller would be liable pursuant to Section 6.4. Costs of defending or contesting such Tax Claims are to be borne by Seller unless the Tax Claim relates to a Straddle Period, in which event such costs shall be fairly apportioned as described below. Purchaser and RSA SLISI at their own expense each shall cooperate with Seller in contesting any Tax Claim, which cooperation shall include the retention and, upon Seller's request, the provision of records and information that are reasonably relevant to such Tax Claim and making employees available on a mutually convenient basis to provide such notice additional information or explanation of any material provided hereunder. Notwithstanding the foregoing, Seller shall not affect Lessee's obligations hereunder neither consent nor agree to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take settlement of any action Tax Claim with respect to such claim any liability for Taxes that may affect the liability for any state, federal or foreign income tax of RSA SLISI or any affiliated group (as defined in section 1504(a) of the Code) of which RSA SLISI is a member for any Post-Closing Tax Period without the prior written consent of Lessee for 30 days following the receipt of such notice by Lessee; providedPurchaser, howeverwhich consent shall not be unreasonably withheld, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lesseeconditioned or delayed, and such Indemnitee neither Seller, nor any Affiliate of Seller, shall take no action file an amended Tax Return that may increase the liability for as long as it is legally able to do so (it being understood that an Indemnitee Taxes of RSA SLISI for any Post-Closing Tax Period without the prior written consent of Purchaser, which consent shall not be entitled to pay the Tax claimed unreasonably withheld, conditioned or delayed. Purchaser and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee Seller shall act jointly control all proceedings taken in connection with paying the any Tax in the manner that is the least prejudicial Claims relating solely to the pursuit a Straddle Period of the contest). In addition, such Indemnitee RSA SLISI and each party shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after bear its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable own out-of-pocket costs and reasonable attorney expenses of the contest and accountants fees), in good faith all joint costs and expenses of the contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising borne in the same administrative or judicial proceeding that are unrelated to ratio as the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee applicable proposed Tax would be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxallocated.
Appears in 1 contract
Contests. If a any written claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to Section 19.2, such Tax Indemnitee shall promptly give notify Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action together with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee; provided, however, that, if such Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Indemnitee shall take no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for all documentation received from a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunderauthority. If requested by Lessee in writing a written request to such Tax Indemnitee within 30 thirty (30) days after its receipt of such notice, such Tax Indemnitee shall, at the expense of shall permit Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), to in good faith control the contest (orincluding, without limitation, by pursuit of appeals and administrative procedures) except if permitted by applicable lawthe Tax in issue from such claim or any set of similar or related claims is less than $10,000 in which case the Tax Indemnitee may in good faith control the contest or elect to have Lessee control the same. If Lessee controls the contest, allow such Tax Indemnitee shall provide to Lessee and its representatives a power of attorney in form reasonably satisfactory to contest) through appropriate administrative Lessee and judicial proceedings the validity, applicability or amount such other documentation as Lessee may reasonably request to pursue such contest on behalf of such Taxes Tax Indemnitee. Lessee shall consult in good faith with the Tax Indemnitee with respect to the contest of such claim but the decisions regarding what actions to be taken shall be made by Lessee in its sole judgment. In addition, Lessee shall keep the Tax Indemnitee reasonably informed as to the progress of the contest, and shall provide the Tax Indemnitee with a copy of (Xor appropriate excerpts from) resisting payment thereofany reports or claims issued by the relevant auditing agents or taxing authority in connection with such claim or the contest thereof Notwithstanding anything contained in this Section 19.2, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue contest any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue claim or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of contest any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take may settle any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim contest without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), 19.2 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of for such claim) Tax, and (B) shall pay to Lessee any amount of Tax previously paid or advanced by Lessee pursuant to this Section 6(b19.2 other than the costs and expenses of the contest of such claim paid by the Lessee, together with interest thereon at the underpayment rate, as defined in Section 6621 of the Code. Notwithstanding any of the foregoing in this Section 19.2(e), Lessee may, at any time and with notice to the Lessor, contest the property taxes, ad valorem taxes and other Impositions for which the Lessee has an obligation to indemnify any Tax Indemnitee hereunder. Each Tax Indemnitee shall, upon the Lessee's request provide to Lessee and its representatives a power of attorney in form reasonably satisfactory to Lessee and such other documentation as Lessee may reasonably request to permit Lessee to conduct any such contest. If any Tax Indemnitee or any Affiliate thereof shall obtain a refund (including by way of credit) of all or any part of any Tax with respect to which the Lessee shall have paid on behalf of such Tax Indemnitee or reimbursed such Tax Indemnitee, then such Tax Indemnitee shall, so long as no Lease Event of Default shall have occurred and be continuing, pay to the Lessee any such refund (including any applicable interest received with respect to such Tax, plus interest at the rate refund or that would have been payable by the relevant taxing authority received with respect to such refund but for a refund counterclaim or other claim not indemnified by Lessee hereunder) plus any tax savings realized by such Tax Indemnitee as a result of a payment pursuant to this sentence (it being understood that the calculation of such Taxtax savings shall take into account any additional income taxes incurred by such Tax Indemnitee as a result of the receipt or accrual of such refund). The Tax Indemnitee shall make any payments to the Lessee under this Section l9.2 within ten (10) days of the receipt of such refund.
Appears in 1 contract
Sources: Lease Agreement (Griffin Capital Essential Asset REIT II, Inc.)
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for Taxes any Imposition as to which the Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could may have an indemnity obligation hereunderpursuant to Section 14.5(a), or if any Tax Indemnitee shall determine that any Imposition as to which the Lessee may have an indemnity obligation pursuant to Section 14.5(a) may be payable, such Tax Indemnitee shall promptly give notify Lessee notice in writing of such claim (provided, however, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the Owner Participant unless such failure shall materially adversely affect the right to contest such claim) and shall not take any action with respect to such claim claim, proceeding or Tax Imposition without the written consent of Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for 30 thirty (30) days following after the receipt of such notice by Lessee; provided, however, thatthat in the case of any such claim or proceeding, if such Tax Indemnitee shall be required by law or regulation to take action prior to the end of such 30-day thirty (30)-day period, such Tax Indemnitee shall, shall in such notice to Lessee, so inform Lessee, and such Tax Indemnitee shall not take no any action with respect to such claim, proceeding or Imposition without the consent of Lessee (such consent not to be unreasonably withheld or unreasonably delayed) for as long as it is legally able to do so ten (it being understood that an 10) days after the receipt of such notice by Lessee unless the Tax Indemnitee shall be entitled required by law or regulation to pay the Tax claimed and ▇▇▇ for a refund take action prior to the end of such 30-day period if ten (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest)10)-day period. In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claimbe entitled for a period of thirty (30) furnish Lessee with copies of any requests for information days from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such noticenotice from the Tax Indemnitee (or such shorter period as the Tax Indemnitee has notified Lessee is required by law or regulation for the Tax Indemnitee to commence such contest) to request in writing that such Tax Indemnitee contest the imposition of such Tax, such at Guarantor's and Lessee's joint and several expense and the Tax Indemnitee shall, at the joint and several expense of Lessee (including all reasonable out-of-pocket costs Guarantor and reasonable attorney and accountants fees)Lessee, in good faith conduct and control such contest (orincluding, if permitted without limitation, by applicable law, allow Lessee pursuit of appeals) related to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by Impositions (Xprovided, however, that (A) if such contest involves a tax other than a tax on net income and can be pursued independently from any other proceeding involving a tax liability of such Tax Indemnitee, the Tax Indemnitee, at Lessee's request, shall allow Guarantor or Lessee to conduct and control such contest and (B) in the case of any contest, the Tax Indemnitee may request Guarantor or Lessee to conduct and control such contest) by, in the sole discretion of the Person conducting and controlling such contest, (l) resisting payment thereof, (Y2) not paying the same except under protest protest, if protest is necessary and proper or proper, (Z3) if the payment is be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings, or (4) taking such other action as is reasonably requested by Guarantor or Lessee from time to time. If requested The party controlling any contest shall consult in good faith with the non-controlling party and shall keep the noncontrolling party reasonably informed as to do so the conduct of such contest; provided that, all decisions ultimately shall be made in the sole discretion of the controlling party. The parties agree that a Tax Indemnitee may at any time decline to take further action with respect to the contest of any Imposition and may settle such contest if such Tax Indemnitee shall waive its rights to any indemnity from Lessee that otherwise would be payable in respect of such claim (and any future claim by Lesseeany taxing authority, the Indemnitee contest of which is precluded by reason of such resolution of such claim) and shall appeal pay to Lessee any adverse administrative amount previously paid or judicial decisionadvanced by Lessee pursuant to this Section 14.5 by way of indemnification or advance for the payment of an Imposition other than expenses of such contest. Notwithstanding the foregoing provisions of this Section 14.5, except that the a Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, and neither Guarantor nor Lessee shall be permitted to contest any action regarding any appeal Impositions in its own name or that of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Tax Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay and shall pay to such Tax Indemnitee on demand and on an After Tax Basis all reasonable out-of-pocket costs costs, losses and reasonable attorney and accountants fees expenses that such Tax Indemnitee shall incur actually incurs in connection with contesting such claimImpositions, including, without limitation, all reasonable legal, accounting and investigatory fees and disbursements, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk danger of forfeituresale, sale forfeiture or loss of any Property, or any part thereof or interest therein, will not interfere with the Aircraft payment of Rent, and will not result in risk of criminal liability, (unless C) if such contest shall involve the payment of the Imposition prior to the contest, Lessee shall have made provisions provide to protect the interests of any Tax Indemnitee an interest-free advance in an amount equal to the Imposition that the Tax Indemnitee is required to pay (with no additional net after-tax cost to such Tax Indemnitee), (D) in the case of a claim that must be pursued in the name of a Tax Indemnitee (or an Affiliate thereof), Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Lessee and reasonably satisfactory to Tax Indemnitee stating that a reasonable basis exists to contest such claim (or, in the case of an appeal of an adverse determination, an opinion of such counsel to the effect that the position asserted in such appeal will more likely than not prevail) and (E) no Lease Event of Default hereunder shall have occurred and be continuing continuing. Each Tax Indemnitee shall at the time the contest is begun unless Lessee's expense supply Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contestinformation and documents reasonably requested by Lessee as are in such Tax Indemnitee's possession and as are necessary or advisable for Lessee to participate in any action, suit or proceeding to the amount of the extent permitted by this Section 14.5(b); provided that, such Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could shall not be raised with any or all of the other Aircraft leased by the Owner Participant required to disclose its tax return to Lessee to the extent that the information deemed necessary or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable desirable by Lessee pursuant contained therein is otherwise made available to this Section 6(b) without the written permission of Lessee, Lessee in a form which will not hinder Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome contest of such claim) shall terminateaction, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid suit or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxproceeding. Notwithstanding anything contained in this Section 6(b)herein to the contrary, an a Tax Indemnitee will not be required to contest a claim with respect to the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Tax Indemnitee (A) shall waive its right to indemnity indemnification under this Section 6(b), 14.5 with respect to such Tax (and any directly related claim and any related claim with respect to other taxable years the outcome contest of which is determined based upon the outcome precluded or otherwise materially adversely affected as a result of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Taxwaiver.
Appears in 1 contract
Contests. If a written any claim is shall be made against an any Tax Indemnitee or if any proceeding is shall be commenced against an any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which Lessee could be liable for payment or indemnity hereunder, or if an Indemnitee makes a determination that a Tax is due for which Lessee could the Lessees may have an indemnity obligation hereunderpursuant to SECTION 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to SECTION 7.4 may be payable, such Tax Indemnitee shall promptly give Lessee notice notify ADESA. ADESA shall be entitled, at its expense, to participate in, and, to the extent that ADESA desires to, assume and control the defense thereof; PROVIDED, HOWEVER, that ADESA, shall have acknowledged in writing its and each Lessee's obligation to fully indemnify such Tax Indemnitee in respect of such claim (providedaction, howeversuit or proceeding if the contest is unsuccessful; and, PROVIDED FURTHER, that the failure to provide such notice ADESA shall not affect be entitled to assume and control the defense of any such action, suit or proceeding (but the Tax Indemnitee shall then contest, at the sole cost and expense of ADESA and the Lessees, on behalf of ADESA with representatives reasonably satisfactory to ADESA or a Lessee's obligations hereunder ) if and to the Owner Participant extent that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any risk of imposition of criminal liability or any material risk of civil liability in excess of $5,000,000 on such Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless such failure ADESA or a Lessee shall materially adversely affect have posted a bond or other security satisfactory to the right to contest such claim) and shall not take any action with relevant Tax Indemnitees in respect to such claim risk, (B) such proceeding involves Claims not fully indemnified by the Lessees which ADESA and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or Tax without proceeding involves matters which extend beyond or are unrelated to the consent of Lessee for 30 days following Transaction and if determined adversely could be materially detrimental to the receipt interests of such notice Tax Indemnitee notwithstanding indemnification by Lessee; providedthe Lessees or (E) such action, howeversuit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, that, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be required to conduct such contest only if ADESA shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by law the Tax Indemnitee and reasonably satisfactory to take action prior ADESA stating that a reasonable basis exists to contest such claim or (ii) in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the end of effect that such 30-day periodappeal is more likely than not to be successful, PROVIDED, HOWEVER, such Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Tax Indemnitee shall take in no action for as long as it is legally able to do so (it being understood that an Indemnitee shall be entitled to pay the Tax claimed and ▇▇▇ for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Indemnitee shall act in connection with paying the Tax in the manner that is the least prejudicial to the pursuit of the contest). In addition, such Indemnitee shall (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may event be required to indemnify hereunder. If requested by Lessee in writing within 30 days after its receipt of such notice, such Indemnitee shall, at the expense of Lessee (including all reasonable out-of-pocket costs and reasonable attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (X) resisting payment thereof, (Y) not paying the same except under protest if protest is necessary and proper or (Z) if the payment is made, using reasonable efforts to obtain a refund thereof in appeal an appropriate administrative and/or judicial proceeding. If requested to do so by Lessee, the Indemnitee shall appeal any adverse administrative or judicial decision, except that the Indemnitee shall not be required to pursue any appeals determination to the United States Supreme Court. If The Tax Indemnitee may participate in a reasonable manner at its own expense and to the extent the Indemnitee is able to separate the contested issue or issues from other issues arising with its own counsel in the same administrative or judicial any proceeding that are unrelated to the transactions contemplated conducted by the Operative Documents without, ADESA in the good faith judgment of such Indemnitee, adversely affecting such Indemnitee, such Indemnitee shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Indemnitee's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by an Indemnitee, such Indemnitee shall consult accordance with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest. An Indemnitee shall not fail to take any action expressly required by this Section 6(b)(iv) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee (except as contemplated by this Section 6(b)(iv)). Notwithstanding the foregoing, in no event shall an Indemnitee be required to pursue any contest (or to permit Lessee to pursue any contest) unless (A) Lessee shall have agreed to pay such Indemnitee on demand all reasonable out-of-pocket costs and reasonable attorney and accountants fees that such Indemnitee shall incur in connection with contesting such claim, (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free basis and with no additional net after-tax cost to such Indemnitee (and such Indemnitee shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any tax benefits resulting from making any such payment), (C) such Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Lessee shall have made provisions to protect the interests of any such Indemnitee), (D) no Lease Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to such Indemnitee before proceeding with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee for reasonable expenses, and (E) in the case of a contest that is being pursued by an Indemnitee, the aggregate amount of the claim (together with the amount of all similar or logically related claims that have been or could be raised with any or all of the other Aircraft leased by the Owner Participant to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this Section 6(b)(iv)) is at least $3,000. Notwithstanding the foregoing, if any Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Lessee pursuant to this Section 6(b) without the written permission of Lessee, Lessee's obligation to indemnify such Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to this Section 6(b)(iv), and subject to Section 6(b)(iii), such Indemnitee shall repay to Lessee any amount previously paid or advanced to such Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax. Notwithstanding anything contained in this Section 6(b), an Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Lessee's consent if such Indemnitee (A) shall waive its right to indemnity under this Section 6(b), with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim) and (B) shall pay to Lessee any amount previously paid or advanced by Lessee pursuant to this Section 6(b) with respect to such Tax, plus interest at the rate that would have been payable by the relevant taxing authority with respect to a refund of such Tax.
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Sources: Master Agreement (Allete Inc)