Common use of Tax Returns; Taxes Clause in Contracts

Tax Returns; Taxes. The Acquiring Corporation has duly filed all material federal, state, county, local and foreign tax returns and reports required to be filed by it, including those with respect to income, payroll, property, withholding, social security, employee benefit plans, unemployment, franchise, excise and sales and use taxes and all such returns and reports are true and correct in all material respects; have either paid in full all taxes that have become due as reflected on any such return or report and any interest and penalties with respect thereto or have fully accrued on its books or have established adequate reserves for all taxes payable but not yet due; and have made cash deposits with appropriate governmental authorities representing estimated payments of taxes, including income taxes and employee withholding tax obligations. No extension or waiver of any statute of limitations or time within which to file any return has been granted to or requested by the Acquiring Corporation with respect to any tax. No unsatisfied material deficiency, delinquency or default for any tax, assessment or governmental charge has been claimed, proposed, threatened or assessed against the Acquiring Corporation, nor has the Acquiring Corporation received notice of any such deficiency, delinquency or default (in writing or otherwise). The Acquiring Corporation has no material tax liabilities other than those reflected on the Acquiring Corporation Financial Statements and those arising in the ordinary course of business. The Acquiring Corporation has not been a member of a consolidated group for tax purposes, other than one of which Royale Petroleum was the common parent, and has no liability for taxes under Treasury Regulations Section 1.1502-6 or any similar provision of federal, state, local or foreign law), as a successor, by contract or otherwise. The Acquiring Corporation is not required to make any payments that would be nondeductible under Code Section 280G.

Tax Returns; Taxes. The Acquiring Corporation (i) Each of Southcoast and the Bank has (i) duly and timely filed with the appropriate governmental entity all material federal, state, county, local and foreign tax returns and reports Tax Returns required to be filed by itit (taking into account any applicable extensions), including those with respect to income, payroll, property, withholding, social security, employee benefit plans, unemployment, franchise, excise and sales and use taxes and all such returns Tax Returns are true, correct and reports are true and correct complete in all material respects; have either respects and prepared in compliance with all applicable laws and (ii) timely paid in full all taxes that have become Taxes due as reflected and owing (whether or not shown due on any such return or report and any interest and penalties with respect thereto or have fully accrued on its books or have established adequate reserves for all taxes payable but not yet due; and have made cash deposits with appropriate governmental authorities representing estimated payments of taxes, including income taxes and employee withholding tax obligationsTax Returns). No extension or waiver Neither Southcoast nor the Bank currently is the beneficiary of any statute extension of limitations or time within which to file any return Tax Return. No claim has ever been granted made by a governmental entity in a jurisdiction where Southcoast and the Bank do not file Tax Returns that Southcoast or the Bank is or may be subject to taxation by that jurisdiction. Neither Southcoast nor the Bank has commenced activities in any jurisdiction which will result in an initial filing of a Tax Return with respect to Taxes imposed by a governmental entity that it had not previously been required to file in the immediately preceding taxable period. (ii) The unpaid Taxes of Southcoast and the Bank did not, as of December 31, 2014, exceed the reserve for Tax liabilities (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the balance sheets (rather than in any notes thereto) contained in the Southcoast Financial Statements, which were prepared in accordance with GAAP. Since December 31, 2014, neither Southcoast nor the Bank has incurred any liability for Taxes outside the ordinary course of business or requested otherwise inconsistent with past custom and practice. (iii) There are no liens, charges, restrictions, encumbrances or claims of any kind (collectively, “Liens”) for Taxes upon any property or asset of Southcoast or the Bank, except for Liens for current Taxes the payment of which is not yet delinquent, or for Taxes contested in good faith through appropriate proceedings and reserved against in accordance with GAAP. (iv) There are no deficiencies for Taxes with respect to Southcoast and the Bank that have been set forth or claimed in writing, or proposed or assessed by a governmental entity. There are no pending, proposed or, to the knowledge of Southcoast, threatened audits, investigations, disputes or claims or other actions for or relating to any liability for Taxes with respect to Southcoast and the Bank. No material issues relating to Taxes of Southcoast or the Bank were raised by the Acquiring Corporation relevant governmental entity in any completed audit or examination that would reasonably be expected to recur in a later taxable period. None of Southcoast, the Bank or any predecessor has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, or has made any request in writing for any such extension or waiver, that remains in effect. Except as set forth in Section 3.2(f)(iv) of the Disclosure Memorandum, there is not currently in effect any power of attorney authorizing any Person to act on behalf of Southcoast or the Bank, or receive information relating to Southcoast or the Bank, with respect to any taxTax matter. No unsatisfied material deficiency(v) Neither Southcoast nor the Bank has requested or received any ruling from any governmental entity, delinquency or default for signed any taxbinding agreement with any governmental entity (including, assessment or governmental charge has been claimedwithout limitation, proposed, threatened or assessed against the Acquiring Corporation, nor has the Acquiring Corporation received notice of any such deficiency, delinquency or default (in writing or otherwise). The Acquiring Corporation has no material tax liabilities other than those reflected on the Acquiring Corporation Financial Statements and those arising in the ordinary course of business. The Acquiring Corporation has not been a member of a consolidated group for tax purposes, other than one of which Royale Petroleum was the common parent, and has no liability for taxes under Treasury Regulations Section 1.1502-6 or any similar provision of federal, state, local or foreign law), as a successor, by contract or otherwise. The Acquiring Corporation is not required to make any payments advance pricing agreement) that would be nondeductible under Code Section 280G.affect any amount of

Tax Returns; Taxes. The Acquiring Corporation Mizar (a) has duly filed all U.S. federal and ------------------ material federal, state, county, local and foreign tax returns and reports required to be filed by it, including those with respect to income, payroll, property, withholding, social security, employee benefit plans, unemployment, franchise, excise and sales and use taxes and all such returns and reports are true and correct in all material respects; have (b) has either paid in full all taxes that have become due as reflected on any such return or report and any interest and penalties with respect thereto or have fully accrued on its books or have established adequate reserves for all taxes payable but not yet due; and have (c) has made cash deposits with appropriate governmental authorities representing estimated payments of taxes, including income taxes and employee withholding tax obligations. No extension or waiver of any statute of limitations or time within which to file any return has been granted to or requested by the Acquiring Corporation Mizar with respect to any tax, except that Mizar has been granted extensions for the filing of its federal tax returns for the year ended June 30, 1997, and its Texas franchise taxes are paid pursuant to a valid extension agreement. No unsatisfied material deficiency, delinquency or default for any tax, assessment or governmental charge has been claimed, proposed, threatened proposed or assessed against the Acquiring CorporationMizar, nor has the Acquiring Corporation Mizar received notice of any such deficiency, delinquency or default (in writing or otherwise)default. The Acquiring Corporation Mizar has no material tax liabilities other than those reflected on the Acquiring Corporation Financial Statements Mizar Balance Sheet and those arising in the ordinary course of businessbusiness since the date thereof. Mizar will make available to LSI true, complete and correct copies of Mizar's consolidated U.S. federal tax returns for the last five years and make available such other tax returns requested by LSI. The Acquiring Corporation has not U.S. federal income tax liabilities of Mizar have been a member of a consolidated group paid for tax purposesall fiscal years up to and including the year ended June 30, other than one of which Royale Petroleum was the common parent, and has no liability for taxes under Treasury Regulations Section 1.1502-6 or any similar provision of federal, state, local or foreign law), as a successor, by contract or otherwise. The Acquiring Corporation is not required to make any payments that would be nondeductible under Code Section 280G.1997.

Tax Returns; Taxes. The Acquiring Corporation Royale Petroleum has duly filed all material federal, state, county, local and foreign tax returns and reports required to be filed by it, including those with respect to income, payroll, property, withholding, social security, employee benefit plans, unemployment, franchise, excise and sales and use taxes and all such returns and reports are true and correct in all material respects; have either paid in full all taxes that have become due as reflected on any such return or report and any interest and penalties with respect thereto or have fully accrued on its books or have established adequate reserves for all taxes payable but not yet due; and have made cash deposits with appropriate governmental authorities representing estimated payments of taxes, including income taxes and employee withholding tax obligations. No extension or waiver of any statute of limitations or time within which to file any return has been granted to or requested by the Acquiring Corporation Royale Petroleum with respect to any tax. No unsatisfied material deficiency, delinquency or default for any tax, assessment or governmental charge has been claimed, proposed, threatened or assessed against the Acquiring CorporationRoyale Petroleum (in writing or otherwise), nor has the Acquiring Corporation Royale Petroleum received notice of any such deficiency, delinquency or default (in writing or otherwise)default. The Acquiring Corporation Royale Petroleum has no material tax liabilities other than those reflected on the Acquiring Corporation Royale Petroleum Financial Statements and those arising in the ordinary course of businessbusiness since March 31, 2004. The Acquiring Corporation Royale Petroleum has not been a member of a consolidated group for tax purposes, other than one of which Royale Petroleum was the common parent, and has no liability for taxes under Treasury Regulations Section 1.1502-6 or any similar provision of federal, state, local or foreign law), as a successor, by contract or otherwise. The Acquiring Corporation Royale Petroleum is not required to make any payments that would be nondeductible under Code Section 280G.

Tax Returns; Taxes. The Acquiring Corporation Company has duly filed with the appropriate ------------------ governmental agencies all material federal, state, county, local and foreign tax returns and reports, including but not limited to reports of corporate tax, income taxes, withholding taxes, consumption taxes, property and other taxes, assessments, fees, levies or governmental charges (collectively, "Taxes"), required to be filed in connection with or affecting the Company, its operations and its business, and has paid the Taxes shown on its returns or otherwise assessed, levied and due and payable by itthe Company, including those with respect related penalties and/or interest, if any, to incomethe extent that such Taxes, payroll, property, withholding, social security, employee benefit plans, unemployment, franchise, excise and sales and use taxes and all such returns and reports are true and correct in all material respects; have either paid in full all taxes that penalties and/or interest have become due as reflected on due. There is no question known to the Company or the Seller relating to any such return or report that, if determined adversely to the Company, would result in the assertion of any deficiency for any tax or interest, improper filing or penalties. There is no liability known to the Company or the Seller for any Taxes due or owing from any predecessor company to or any company merged with the Company. Except as set forth in SCHEDULE 4.10, neither the National Tax Administration Agency of Japan nor any other taxing authority or agency is now asserting or, to the best of the Company's and the Seller's knowledge, after due inquiry, is threatening to assert, against the Company any deficiency or claim for additional Taxes or interest and penalties with respect thereto thereon or have fully accrued on its books or have established adequate reserves for all taxes payable but improper filing penalties. The Company has not yet due; and have made cash deposits with appropriate governmental authorities representing estimated payments of taxes, including income taxes and employee withholding tax obligations. No extension or been granted any waiver of any statute of limitations limitation with respect to, or time within which to file any return has been granted to any extension of a period for the assessment of, any Japanese or requested foreign tax. The liabilities for Taxes reflected in the balance sheet of the Company as of August 31, 1998 (and on any balance sheet of the Company furnished by the Acquiring Corporation with respect Company or the Seller delivered prior to any tax. No unsatisfied material deficiencythe Closing, delinquency or default for any taxperiods subsequent to August 31, assessment or governmental charge has been claimed1998, proposedincluding, threatened or assessed against without limitation, the Acquiring Corporation, nor has the Acquiring Corporation received notice of any such deficiency, delinquency or default (in writing or otherwise). The Acquiring Corporation has no material tax liabilities other than those reflected on the Acquiring Corporation Financial Statements and those arising in the ordinary course of business. The Acquiring Corporation has not been a member of a consolidated group for tax purposes, other than one of which Royale Petroleum was the common parent, and has no liability for taxes under Treasury Regulations Section 1.1502-6 or any similar provision of federal, state, local or foreign lawClosing Balance Sheet), as a successorare adequate to cover all Taxes due and payable or accruable (including interest and penalties, by contract or otherwise. The Acquiring Corporation is not required to make any payments that would be nondeductible under Code Section 280G.if any, thereon), except for de minimis exceptions only.

Tax Returns; Taxes. The Acquiring Corporation ImaginOn has duly filed all U.S. federal and material federal, state, county, local and foreign tax returns and reports required to be filed by it, including those with respect to income, payroll, property, withholding, social security, employee benefit plans, unemployment, franchise, excise and sales and use taxes it and all such returns and reports are true and correct in all material respects; have either paid in full all taxes that have become due as reflected on any such return or report and any interest and penalties with respect thereto or have fully accrued on its books or have established adequate reserves for all taxes payable but not yet due; and have made cash deposits with appropriate governmental authorities representing estimated required payments of taxes, including income taxes and employee withholding tax obligations. No extension or waiver of any statute of limitations or time within which to file any return has been granted to or 30698_8 -11- requested by the Acquiring Corporation ImaginOn with respect to any tax. No unsatisfied material deficiency, delinquency or default for any tax, assessment or governmental charge has been claimed, proposed, threatened proposed or assessed against the Acquiring CorporationImaginOn, nor has the Acquiring Corporation ImaginOn received notice of any such deficiency, delinquency or default (in writing or otherwise)default. The Acquiring Corporation ImaginOn has no material tax liabilities other than those reflected on the Acquiring Corporation ImaginOn Financial Statements and those arising in the ordinary course of businessbusiness since the date thereof. The Acquiring Corporation has not been a member ImaginOn will make available to Cal Pro true, complete and correct copies of a consolidated group for ImaginOn's tax purposes, other than one returns. There is no dispute or claim concerning any tax liability of which Royale Petroleum was the common parent, and has no liability for taxes under Treasury Regulations Section 1.1502-6 ImaginOn or any similar provision of federalits subsidiaries either: (a) raised by any taxing authority in writing; (b) as to which ImaginOn has received notice concerning a potential audit of any return filed by ImaginOn; and (c) there is no outstanding audit or pending audit of any tax return filed by ImaginOn, state, local or foreign law), except as a successor, by contract or otherwise. The Acquiring Corporation is not required to make any payments that would be nondeductible under Code Section 280G.set forth on Schedule 3.12.

Tax Returns; Taxes. The Acquiring Corporation Except as would not, individually or in the aggregate, have a Material Adverse Effect, (a) each of the Partnership Entities has duly prepared and timely filed (taking into account any extension of time within which to file) all income and other material federal, state, county, local and foreign tax returns and reports Tax Returns required to be filed by it, including those with respect to income, payroll, property, withholding, social security, employee benefit plans, unemployment, franchise, excise and sales and use taxes any of them and all such returns filed Tax Returns are complete and reports are true and correct accurate in all material respects; have either , (b) each of the Partnership Entities has timely paid in full all taxes Taxes that have become due as reflected on are required to be paid by any such return or report and any interest and penalties with respect thereto or have fully accrued on its books or have established adequate reserves for all taxes payable but of them (and, where payment is not yet due; and have , has made cash deposits adequate provision for such Taxes on such Partnership Entity’s financial statements in accordance with appropriate governmental authorities representing estimated payments of taxesGAAP), including income taxes and employee withholding tax obligations. No extension (c) there are no audits, examinations, investigations, actions, suits, claims or waiver other proceedings in respect of any statute Taxes pending or threatened in writing nor has any deficiency for any Tax been assessed by any Governmental Authority in writing against any Partnership Entity, (d) all Taxes required to be withheld by any Partnership Entity have been withheld and paid over to the appropriate Tax authority (except in the case of limitations this clause (d) or time within which to file any return has been granted to clause (a) or requested by the Acquiring Corporation (b) above, with respect to matters contested in good faith and for which adequate reserves have been established on the Partnership’s financial statements included or incorporated by reference in the NEP Execution Date SEC Documents), (e) none of the Partnership Entities will be required to include any tax. No unsatisfied material deficiencyitem of income in, delinquency or default exclude any item of deduction from, taxable income for any tax, assessment taxable period (or governmental charge has been claimed, proposed, threatened or assessed against the Acquiring Corporation, nor has the Acquiring Corporation received notice portion thereof) ending after any Closing Date as a result of any (A) change in method of accounting for a taxable period ending on or prior to such deficiencyClosing Date, delinquency or default (B) “closing agreement” as described in writing or otherwise). The Acquiring Corporation has no material tax liabilities other than those reflected on Section 7121 of the Acquiring Corporation Financial Statements and those arising in the ordinary course of business. The Acquiring Corporation has not been a member of a consolidated group for tax purposes, other than one of which Royale Petroleum was the common parent, and has no liability for taxes under Treasury Regulations Section 1.1502-6 Code (or any corresponding or similar provision of federalstate, local or foreign law) executed on or prior to such Closing Date, (C) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign law), (D) installment sale or open transaction disposition made on or prior to such Closing Date, (E) election under Section 108(i) of the Code (or any comparable provisions of state, local or foreign law), or (F) prepaid amount received or paid on or prior to such Closing Date, and (f) there are no outstanding agreements, waivers or arrangements extending the statutory period of limitation applicable to any claim for, or the period for the collection or assessment of, Taxes due from or with respect to any of the Partnership Entities for any taxable period. None of the Partnership Entities has entered into any transaction that, as of the date of this Agreement, has been identified by the Internal Revenue Service in published guidance as a “reportable transaction” as defined under Section 1.6011-4 of the Treasury Regulations. There are no Tax Liens upon any of the assets or properties of the Partnership Entities, other than with respect to Taxes not yet due and payable. Except as disclosed in Schedule E, no NEP Entity (A) is or has ever been a member of an affiliated group of corporations filing a consolidated federal income Tax Return, or (B) has any liability for the Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any similar provision of any state, local, or foreign law), as a transferee or successor, by contract contract, or otherwise. The Acquiring Corporation Except as disclosed in Schedule E, no NEP Entity is not required a party to, or bound by, or has any obligation under, any tax allocation or sharing agreement or similar contract or arrangement or any agreement that obligates it to make any payments payment computed by reference to the Taxes, taxable income or taxable losses of any other Person. The Partnership has made a valid election pursuant to Section 301.7701-3(c) of the Treasury Regulations to be taxed as a corporation for U.S. federal income tax purposes, and such election is currently in effect. The Partnership reasonably expects that would be nondeductible under it is not, and has not been during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, a “United States real property holding corporation,” as defined in Section 897(c)(2) of the Code. None of the Partnership Entities has, within the five years preceding the applicable Closing Date, been either a “distributing corporation” or a “controlled corporation” in a distribution in which the parties to such distribution treated the distribution as one to which Section 355 of the Code Section 280G.was applicable.

Tax Returns; Taxes. The Acquiring Corporation IPS has duly filed all U.S. federal and material federal, state, county, local and foreign tax returns and reports required to be filed by it, including those with respect to income, payroll, property, withholding, social security, employee benefit plans, unemployment, franchise, excise and sales and use taxes and all such returns and reports are true and correct in all material respects; have has either paid in full all taxes that have become due as reflected on any such return or report and any interest and penalties with respect thereto or have has fully accrued on its books or have established adequate reserves for all taxes payable but not yet due; and have has made cash deposits with appropriate governmental authorities representing estimated payments of taxes, including income taxes and employee withholding tax obligations. No extension or waiver of any statute of limitations or time within which to file any return has been granted to or requested by the Acquiring Corporation IPS with respect to any tax. No unsatisfied material deficiency, delinquency or default for any tax, assessment or governmental charge has been claimed, proposed, threatened proposed or assessed against the Acquiring CorporationIPS, nor has the Acquiring Corporation IPS received notice of any such deficiency, delinquency or default (in writing or otherwise)default. The Acquiring Corporation IPS has no material tax liabilities other than those reflected on the Acquiring Corporation IPS Financial Statements and those arising in the ordinary course of businessbusiness since the date thereof. The Acquiring Corporation has not been a member IPS will make available to MEDY true, complete and correct copies of a IPS's consolidated group U.S. federal tax returns for the last three years and make available such other tax purposes, other than one returns requested by MEDY. There is no dispute or claim concerning any tax liability of which Royale Petroleum was the common parent, and has no liability for taxes under Treasury Regulations Section 1.1502-6 IPS or any similar provision of federal, state, local its subsidiaries either: (a) raised by any taxing authority in writing; (b) as to which IPS has received notice concerning a potential audit of any return filed by IPS; and (c) there is no outstanding audit or foreign law), as a successor, pending audit of any tax return filed by contract or otherwise. The Acquiring Corporation is not required to make any payments that would be nondeductible under Code Section 280G.IPS.