Failure to Pay Additional Amounts Sample Clauses
The 'Failure to Pay Additional Amounts' clause defines the consequences and procedures if a party does not pay required extra sums, such as taxes or fees, that are owed in addition to the main payment obligations. Typically, this clause applies when withholding taxes or other deductions are imposed by law, and the paying party is required to gross up payments so the recipient receives the full agreed amount. If the payer fails to cover these additional amounts, the clause may allow the recipient to claim the shortfall or even terminate the agreement in severe cases. Its core function is to ensure that the recipient is not disadvantaged by legal or tax-related deductions, thereby allocating the risk of such deductions to the paying party and maintaining the intended value of the transaction.
Failure to Pay Additional Amounts. Notwithstanding anything to the contrary set forth herein, the failure of any Borrower to pay any amount demanded by any Lender pursuant to Sections 3.5, 3.8, 3.10, 3.11, 3.12, 3.14 or 11.17 shall not be deemed to constitute a Default hereunder to the extent that such Borrower is contesting in good faith its obligations to pay such amount by ongoing discussions diligently pursued with such Lender or by appropriate proceedings; provided, however, that under no circumstances shall any such failure to pay continue for more than forty days from the date on which the related amount is demanded consistent with the terms of this Agreement, at which date such failure to pay shall become a Default.