SPI Remedies with Respect to IRS Claim Clause Samples
The "SPI Remedies with Respect to IRS Claim" clause defines the rights and actions available to the SPI (Special Purpose Issuer or similar party) if a claim or action is brought by the Internal Revenue Service (IRS) that affects the agreement. Typically, this clause outlines the procedures SPI may follow to contest, settle, or respond to IRS claims, and may specify the allocation of costs or responsibilities between parties in such situations. Its core function is to provide a clear framework for addressing tax-related disputes or liabilities arising from IRS actions, thereby managing risk and ensuring both parties understand their obligations and remedies in the event of an IRS claim.
SPI Remedies with Respect to IRS Claim. Executive shall notify -------------------------------------- SPI in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by SPI of a Gross-Up Underpayment. Such notification shall be given as soon as practicable but not later than ten business days after Executive receives written notice of such claim and shall apprise SPI of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim before the last day of the 30-day period following the date on which he gives such notice to SPI (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If SPI notifies Executive in writing before the last day of such period that it desires to contest such claim and that it will bear the costs and provide the indemnification as required by this sentence, Executive shall:
(i) give SPI any information reasonably requested by SPI relating to such claim,
(ii) take such action in connection with contesting such claim as SPI shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by counsel reasonably selected by SPI and reasonably satisfactory to Executive,
(iii) cooperate with SPI in good faith in order effectively to contest such claim, and
(iv) permit SPI to participate in any proceedings relating to such claim; provided, however, that SPI shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax, income tax, or payroll tax, including interest and penalties, imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this paragraph 7.3, SPI shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and ▇▇▇ for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction, and in one or more appellate courts, as SPI shall det...