Common use of Audits and Other Proceedings Clause in Contracts

Audits and Other Proceedings. (A) Following the Closing Date, if an audit or other administrative or judicial proceeding is initiated by any Tax authority with respect to Taxes of the Company for which Seller may have an indemnification obligation under Section 7.1, Buyer or the Company, as the case may be, shall promptly notify Seller of such audit or proceeding, stating the nature and basis of such claim and the amount thereof, to the extent known. Failure to give such notice shall not relieve Seller from any indemnification obligation which it may have with respect to Section 7.1, except to the extent that Seller is prejudiced thereby. Seller will have the right, at its option, to control the conduct of all stages of such audit or other administrative or judicial proceeding with representatives of its own choosing with respect to Taxes of Company for which Seller may have an indemnification obligation under Section 7.1. At such time as such request is received by Buyer, Buyer or the Company, as the case may be, will furnish Seller and/or its representatives with powers of attorney or any other documentation or authorization necessary or appropriate to enable Seller and/or its representatives to control the conduct of such audit or other proceeding. Buyer shall control the conduct of all stages of all other audits or other administrative or judicial proceedings with respect to Taxes of the Company. Buyer and the Company shall not, and shall not permit any of their Affiliates to, accept any proposed adjustment or enter into any settlement or agreement in compromise regarding any Taxes of the Company for which Seller may have an indemnification obligation under Section 7.1 without the express written consent of Seller. (B) With respect to any audit or other administrative or judicial proceeding that it controls, Seller (x) shall give prompt notice to Buyer of any Tax adjustment proposed in writing pursuant to any audit or other administrative or judicial proceeding controlled by Seller with respect to the assets or activities of the Company, and (y) shall not accept any proposed adjustment or enter into any settlement or agreement in compromise which would bind Buyer or the Company with respect to any Taxes of the Company (other than any such Taxes for which Seller may have an indemnification obligation under Section 7.1) without the express written consent of Buyer, which consent shall not be unreasonably withheld or delayed.

Audits and Other Proceedings. (Aa) Following In the Closing Datecase of any audit, if an audit examination or administrative, judicial or other administrative or judicial proceeding is initiated by any ("Tax authority Proceedings") with respect to Taxes any income Tax Return of the Company and/or the Subsidiaries for which Seller may have an indemnification obligation under Section 7.1, Buyer periods ending on or the Company, as the case may be, shall promptly notify Seller of such audit or proceeding, stating the nature and basis of such claim and the amount thereof, prior to the extent known. Failure to give such notice shall not relieve Seller from Closing Date and including any indemnification obligation which it may have with respect federal and state final returns filed pursuant to Section 7.16.14, except to the extent that Seller is prejudiced thereby. Seller will Tax Matters Partner shall have the right, at its optionexcept as provided below, to control the conduct of such Tax Proceedings and to initiate any claim for refund, file any amended Tax Return or take any other action which it deems appropriate; provided, however, that the Tax Matters Partner shall keep Parent informed of all stages of such audit or other administrative or judicial proceeding with representatives of its own choosing matters with respect to Taxes of Company for which Seller may such Tax Proceeding and shall not agree to or take any action or omit to take any action that would be reasonably likely to have an indemnification obligation under Section 7.1. At such time as such request is received by Buyer, Buyer or the Company, as the case may be, will furnish Seller and/or its representatives with powers of attorney adverse effect upon Parent or any of its subsidiaries, including the Surviving Entity and the Subsidiaries, without the prior written consent of Parent; and provided further that the Tax Matters Partner shall permit Parent to control the prosecution of any claim for any refund and to apply for any credit, in each case which is for the account of Parent pursuant to Section 6.15(b). Each of the Tax Matters Partner, on the one hand, and Parent, its subsidiaries and their respective successors and assigns, on the other documentation hand, shall promptly provide the other notice of any formal or authorization necessary informal inquiry that initiates or appropriate could initiate a Tax Proceeding and shall cooperate in the conduct of such Tax Proceedings, including making books, records and personnel reasonably available during normal business hours and in a form and location reasonably convenient to enable Seller and/or its representatives the Tax Matters Partner and Parent so as to permit the Tax Matters Partner to properly conduct such Tax Proceedings. The Tax Matters Partner shall keep Parent informed of the progress of any such Tax Proceedings. In the event that for any reason the Tax Matters Partner elects not to control the conduct of such audit Tax Proceedings, Parent, subject to applicable provisions of Law, shall be entitled to conduct such Tax Proceedings; provided, Parent shall keep the Tax Matters Partner or other proceeding. Buyer shall control the conduct his designee informed of all stages of all other audits or other administrative or judicial proceedings matters with respect to Taxes of the Company. Buyer and the Company shall not, such Tax Proceeding and shall not permit agree to or take any action or omit to take any action that would be reasonably likely to have an adverse effect upon the former Members without the prior written consent of their Affiliates tothe Tax Matters Partner. (b) Notwithstanding anything contained in this Section 6.15 to the contrary, accept any proposed adjustment refunds or enter into any settlement or agreement in compromise regarding any credits of Taxes of the Company for which Seller may have an indemnification obligation under Section 7.1 without the express written consent or any Subsidiary (as distinguished from any refunds or credits of Seller. (B) With Taxes due to or in respect to any audit or other administrative or judicial proceeding that it controls, Seller (x) shall give prompt notice to Buyer of any Tax adjustment proposed in writing pursuant to any audit or other administrative or judicial proceeding controlled by Seller with respect to the assets or activities former Member of the Company, and ) for any taxable period shall be for the account of Parent. The Tax Matters Partner shall forward to Parent any such refund that the Tax Matters Partner (y) shall not accept or any proposed adjustment or enter into any settlement or agreement in compromise which would bind Buyer or the Company with respect to any Taxes of the Company (other than Members) receives within 10 days of such receipt, or reimburse Parent for any such Taxes credit for which Seller may have an indemnification obligation under Section 7.1) without any of the express written consent Members receives a Tax benefit within 10 days of Buyer, which consent shall not be unreasonably withheld or delayedthe receipt of such benefit.

Audits and Other Proceedings. (A) Purchaser will give prompt notice to Seller of the commencement of any audit or other proceeding which could give rise to a claim for payment or indemnity against Seller under this Agreement, and Seller will give prompt notice to Purchaser of the commencement of any audit or other proceeding which could give rise to a claim for payment or indemnity against Purchaser under this Agreement. Purchaser's or Seller's failure to give such prompt notice will reduce Seller's or Purchaser's respective indemnification obligation pursuant to Section 10.6.4.1 to the extent it is actually prejudiced by such failure. Following the Closing Date, if an audit or other administrative or judicial proceeding is initiated by any Tax authority with respect to Taxes of the Company for which Seller may have an indemnification obligation under Section 7.1, Buyer or the Company, as the case may be, shall promptly notify Seller of such audit or proceeding, stating the nature and basis of such claim and the amount thereof, to the extent known. Failure to give such notice shall not relieve Seller from any indemnification obligation which it may have with respect to Section 7.1, except to the extent that Seller is prejudiced thereby. (i) Seller will have the right, at its option, to control the conduct of all stages of such any audit or other administrative or judicial proceeding with representatives respect to all Taxes relating to Tax Returns of its own choosing or relating to the Company or either Company Subsidiary required to be filed by Seller pursuant to Section 10.6.1, and (ii) Purchaser will control the conduct of all audits or administrative or judicial proceedings with respect to Taxes the Tax liability of the Company and the Company Subsidiaries for any other tax period or portion thereof; PROVIDED, HOWEVER, that Purchaser shall control at its expense that portion of any audit or other administrative or judicial proceeding with respect to any disallowance referred to in clause (y) of Section 10.6.4.1, but only to the extent such control by Purchaser does not materially interfere with Seller's ability to diligently address other issues in connection with such audit or proceedings, it being understood that Seller and Purchaser shall cooperate as reasonably requested in order to maximize Purchaser's ability to control such portion of such audit or proceedings without such interference. (A) With respect to any audit or other proceeding that it controls, Seller (x) will give prompt notice to Purchaser of any Tax adjustment proposed in writing pursuant to any audit or other proceeding controlled by Seller with respect to the assets or activities of either of the Company or either Company Subsidiary; upon Purchaser's reasonable request will discuss with Purchaser and its counsel the position that Seller intends to take regarding any issue concerning such assets or activities; and (y) will not, and will not permit any of its Affiliates to, enter into any settlement or agreement in compromise of any proposed adjustment which purports to bind Purchaser, the Company or either Company Subsidiary with respect to any tax period ending after the Closing Date without the express written consent of Purchaser, which consent will not be unreasonably withheld; and (B) With respect to any audit or proceeding controlled by Purchaser and relating to any period or Tax with respect to which Seller may have an indemnification obligation under Section 7.1. At such time as such request is received by Buyerhereunder, Buyer or the Company, as the case may be, Purchaser (x) will furnish afford Seller and/or and its representatives with powers of attorney or any other documentation or authorization necessary or appropriate counsel a reasonable opportunity to enable Seller and/or its representatives to control participate in the conduct of such audit or other proceeding. Buyer shall control the conduct of all stages of all other audits or other any administrative or judicial proceedings proceeding regarding a proposed adjustment including, without limitation, the right to participate in conferences with respect to Taxes tax authorities and submit pertinent material in support of the Company. Buyer Seller's position; and the Company shall (y) will not, and shall will not permit any of their its Affiliates to, accept any proposed adjustment or enter into any settlement or agreement in compromise regarding any Taxes of the Company which could result in a claim for which indemnification against Seller may have an indemnification obligation under Section 7.1 pursuant to this Agreement without the Seller's express written consent of Seller. (B) With respect to any audit or other administrative or judicial proceeding that it controls, Seller (x) shall give prompt notice to Buyer of any Tax adjustment proposed in writing pursuant to any audit or other administrative or judicial proceeding controlled by Seller with respect to the assets or activities of the Company, and (y) shall not accept any proposed adjustment or enter into any settlement or agreement in compromise which would bind Buyer or the Company with respect to any Taxes of the Company (other than any such Taxes for which Seller may have an indemnification obligation under Section 7.1) without the express written consent of Buyerconsent, which consent shall will not be unreasonably withheld or delayedwithheld.

Audits and Other Proceedings. (Aa) Following the Closing Date, if an Seller shall control the conduct of any audit or other administrative or of judicial proceeding is initiated by any Tax authority with respect to Taxes of any Affiliated Group of which Seller or any of the Company Retained Companies is the common parent or for which Seller otherwise may have an indemnification obligation under be obligated to indemnify Buyer Indemnitees pursuant to Section 7.16.1; provided, that (i) Buyer or may elect to participate in the Company, as the case may be, shall promptly notify Seller control of such audit or proceeding, stating the nature and basis of such claim and the amount thereof, proceeding jointly with Seller to the extent known. Failure such audit or proceeding relates to give Taxes attributable to any Acquired Company for a Bridge Period; (ii) Buyer, in its sole discretion, may assume joint control of any such notice audit or 105 proceeding for Tax years beginning before 1992 for any Affiliated Group of which MAL was the common parent if MAL is placed under supervision by a state regulatory authority or is subject to court supervised conservation, rehabilitation, liquidation or similar proceeding or if there is a transfer of control (including control of Tax audits) of MAL to a party other than Seller or its Affiliates; (iii) Buyer shall not relieve Seller from control any indemnification obligation which it may have with respect to Section 7.1, except audit or proceeding to the extent that (but only to the extent) such audit or proceeding relates to (A) Taxes for which Buyer would be obligated to indemnify Seller is prejudiced therebyIndemnitees pursuant to Section 6.1 or Section 6.5(e)(ii) or (B) Taxes for which the Seller would have been entitled to a refund but for the Failed QSP; and (iv) Buyer shall control any audit or proceeding to the extent (but only to the extent) such audit or proceeding relates to the qualification of the sale of the shares of SWL as a Qualified Stock Purchase. In the event Buyer assumes control or joint control of any audit or administrative or judicial proceeding pursuant to this Section 6.4, Seller will have shall, and shall cause MAL and the rightother Retained Companies to, at its option, to control the conduct of all stages of provide Buyer with any reasonable assistance requested by Buyer in connection with such audit or other administrative or judicial proceeding with representatives of its own choosing with respect to Taxes of Company for which Seller may have an indemnification obligation under Section 7.1. At such time as such request is received by Buyerproceeding, Buyer or the Companyincluding, as the case may bewithout limitation, will furnish Seller and/or its representatives with powers executing any power of attorney or any other documentation or authorization document which is necessary or appropriate to enable Buyer to act on behalf of, or jointly on behalf of, Seller and/or its representatives to control the conduct of such audit or other proceedingMAL. Buyer shall control the conduct of all stages of all other audits or other administrative or judicial proceedings with respect to the liability for Taxes of the CompanyAcquired Companies for any taxable period or portion thereof. With respect to any audit or other proceeding that Seller controls, Seller shall (1) promptly provide Buyer with, or cause to be provided to Buyer, written notice of any claim, or of the commencement of any audit or proceeding, regarding the liability for Taxes of any Affiliated Group for any affiliated Tax year together with all correspondence, notices or other documents received by Seller or any of its Affiliates with respect thereto; (2) provide, or cause to be provided, Buyer with notice of and an opportunity to attend any meeting with the IRS or other taxing authorities regarding any such claim, audit or proceeding; (3) consult with Buyer or its Tax advisors, or cause Buyer or its Tax advisors to be consulted, with respect to any material action Seller or any of its Affiliates may take with respect to any such claim, audit or proceeding; (4) afford, or cause to be afforded to, Buyer and its Tax advisors the Company right to participate in conferences with the relevant taxing authorities (including, without limitation, executing any power of attorney or other 106 document that is required to enable, and, to the extent permitted by applicable law (or by agreement between any or all of Buyer, Buyer's tax advisors, Seller and MAL), is solely for purpose of enabling, Buyer and its Tax advisers to so participate); (5) permit Buyer to be permitted, to review and comment upon any material written submission to the IRS or other taxing authorities prior to its submission; and (6) shall not, and shall not permit any of their its Affiliates to, accept grant any extension or waiver of any applicable statue of limitations for any taxable period beginning after December 31, 1992 or enter into any settlement of agreement in compromise of any proposed adjustment with respect to the liability for Taxes of any Affiliated Group for any affiliated tax year without the express written consent of Buyer; provided that in the event the (w) Buyer fails to consent to any such settlement or agreement in compromise with respect to any Taxes for which Seller or the Seller's Subsidiaries have liability under Section 6.1 to indemnify Buyer Indemnitees; (x) such settlement or agreement would not have the result of materially increasing the Taxes of any Buyer Indemnitees or any consolidated, combined, or unitary group of which any Buyer Indemnitee is a member for any taxable period or portion thereof beginning after the Closing Date or any Taxes for which Buyer has liability pursuant to Section 6.1(b) (in each case through the operation of the terms of such settlement or agreement or through the potential resolutions of the same or similar issues for any such period or portion thereof on the same or similar basis as under such settlement or agreement); (y) Seller identifies the sources from which Taxes due pursuant to such settlement or agreement would be paid, including from the Indemnity Escrow Amount to the extent permitted by Article VIII; and (z) Seller deposits in an escrow account (subject to terms and conditions reasonably acceptable to Buyer), any amount so identified by Seller to be funded from sources other than the Indemnity Escrow Account, then Seller may elect to transfer complete control of the related audit or proceeding to Buyer by providing written notice to Buyer, in which case the amount for which Seller and the Selling Subsidiaries shall be required to indemnify Buyer Indemnitees on account of Taxes expressly covered by such settlement or agreement in compromise shall be limited to the amount of such proposed settlement or agreement in compromise plus interest, penalties and additions to Tax determined through the date Buyer assumes control. (b) During the period beginning on the Execution Date and ending on the Closing Date, none of the Seller or its Affiliates shall enter into any settlement or agreement in compromise regarding any Taxes of the Company for which Seller may have an indemnification obligation under Section 7.1 without the express written consent of Seller. (B) With respect to any audit or other administrative or judicial proceeding that it controls, Seller (x) shall give prompt notice to Buyer of any Tax adjustment proposed in writing pursuant to any audit or other administrative or judicial proceeding controlled by Seller with respect to Taxes with the assets IRS or activities of the Companyany other taxing authority, and (y) shall not accept any proposed adjustment or enter into any settlement or agreement in compromise which would bind Buyer or the Company with respect to any Taxes of the Company (other than any such Taxes for which Seller may have including without limitation by executing an indemnification obligation under Section 7.1) IRS Form 870-AD, without the express prior written consent of Buyer, which consent shall not be unreasonably withheld. For purposes of the preceding sentence, consent shall be deemed to have been reasonably withheld if Buyer withholds consent from a settlement or delayedagreement in compromise that would adversely affect the protection from Losses resulting from, or arising out of, Taxes that would otherwise have been provided to Buyer, the Acquired Companies or an Affiliate of any thereof, by the Indemnity Escrow Account or by funds otherwise provided for in this Agreement to secure the obligations of Seller and its Affiliates under Article VIII, or would otherwise result in a Material Adverse Effect to Buyer, the Acquired Companies or any Affiliate thereof. (c) Seller and Selling Subsidiaries shall use their best efforts, in their reasonable business judgment, to expedite the determination of their federal income tax liability for all taxable periods through the Closing Date consistent with minimizing the taxes payable by Seller and its Affiliates. Buyer shall have standing to seek to have the Bankruptcy Court compel Seller and the Selling Subsidiaries to take such actions as are necessary to comply with the foregoing requirement. Seller shall provide in any plan of reorganization proposed by it for the Bankruptcy Court to retain jurisdiction after confirmation of such plan over resolution of disputes between Seller and the IRS regarding the allowance or disallowance of federal income tax claims for tax periods prior to the confirmation of such plan. (d) All references to the right of Buyer to control or participate in any audit or proceeding, or to consent to or approve any settlement or agreement in compromise, and all rights granted to Buyer under the fourth sentence of Section 6.4(a), shall extend also to PennCorp to the extent the audit or proceeding relates to Taxes the payment of which would be guaranteed to Seller by PennCorp (including any Taxes the refund of which is so guaranteed). Any right to exercise control of, or to approve or consent to, any matter covered by the preceding sentence shall require the exercise jointly by, or require the joint consent or approval of, Buyer and PennCorp. 108