Common use of Claims and Contests Clause in Contracts

Claims and Contests. If a written claim is received by LESSOR for Taxes, which claim, if sustained, would require the payment of an indemnity by LESSEE pursuant to this Article 15, LESSOR shall notify LESSEE of such claim within thirty (30) days after its receipt, provided that failure to provide such notice within thirty (30) days will not relieve LESSEE of any indemnification obligation pursuant to this Article 15 if such failure does not preclude LESSEE from exercising its contest rights hereunder. Payments due from LESSEE to LESSOR pursuant to this Article 15 shall be made directly to LESSOR within thirty (30) days of written demand by LESSOR to LESSEE. If requested by LESSEE in writing, LESSOR shall upon receipt of indemnity reasonably satisfactory to it and at the expense of LESSEE (including, without limitation, all reasonable costs, expenses, legal and accountants' fees, and disbursements, penalties, interest incurred in contesting such claim, and additions to tax) in good faith, in the name of LESSOR or, if requested by LESSEE, in the name of LESSEE (or permit LESSEE, if desired by LESSEE, to contest in the name of LESSEE) if permissible under applicable laws, the validity, applicability or amount of such Taxes by (i) resisting payment thereof if practicable only if adequate reserves have been made for such Taxes or, if required, an adequate bond has been posted, (ii) paying the same under protest, if protest shall be necessary and proper, (iii) if payment shall be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, and (iv) taking such other action as is reasonably requested by LESSEE from time to time including not paying such Taxes only if adequate reserves have been made for such Taxes or, if required, an adequate bond has been posted. LESSOR shall determine the method of any contest and (in good faith consultation with LESSEE) control the conduct thereof. Notwithstanding anything contained in this Article 15.4, LESSOR will not be required to contest, or to continue to contest, the validity, applicability or amount of any Tax (or portion thereof) (x) if such contest would result in any material risk of criminal penalties or any material risk of sale, forfeiture or loss of the Aircraft, (y) if an Event of Default has occurred and is continuing, or (z) in the case of a contest of a Tax reflected on a return of LESSOR with other taxes of LESSOR that are not indemnified by the LESSEE hereunder, if LESSEE shall not have furnished an opinion of independent tax counsel selected by the LESSEE, and reasonably satisfactory to LESSOR, that a reasonable basis exists for such contest. If LESSOR shall obtain a refund of all or any part of such Taxes for which an indemnity was paid by LESSEE, LESSOR shall pay LESSEE the amount of such refund; PROVIDED, HOWEVER, that such amount shall not be payable before such time as LESSEE shall have made all payments or indemnities to LESSOR then due under this Article 15 and under the Lease or while an Event of Default shall have occurred and be continuing. If in addition to such refund LESSOR shall receive an amount representing interest on the amount of such refund, LESSEE shall be paid that proportion of such interest which is fairly attributable to Taxes paid with an indemnity payment by LESSEE prior to the receipt of such refund or interest and increased by any taxes saved by reason of the deductibility of such payment by LESSOR. LESSEE shall not be deemed to be in default under any of the indemnification provisions under this Article 15 so long as it or LESSOR shall diligently prosecute such contest and LESSEE has indemnified LESSOR to LESSOR's reasonable satisfaction. In case any report or return is required to be made with respect to any obligation of LESSEE under this Article 15.4 or arising out of this Article 15.4, LESSEE will either timely make such report or return in such manner as will show the ownership of the Aircraft in LESSOR, and will as soon as possible send a copy of such report or return to LESSOR, or will notify LESSOR of such requirement and prepare and deliver such report or return to LESSOR in such manner as shall be satisfactory to LESSOR.