Common use of Contest Clause in Contracts

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 9 contracts

Samples: Note Purchase Agreement (Sun Country Airlines Holdings, Inc.), Note Purchase Agreement (United Airlines, Inc.), Note Purchase Agreement (United Airlines, Inc.)

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Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s 's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 8 contracts

Samples: Participation Agreement (Continental Airlines Inc /De/), Participation Agreement (Continental Airlines Inc /De/), Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Lessee could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (provided, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by OwnerLessee; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 9.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner Lessee (except as contemplated by Section 8.3.4(b9.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Lessee to pursue any contest) unless unless (i) Owner Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner Lessee shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Lessee any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner Lessee shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner Lessee in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner Lessee has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by OwnerLessee, Owner Lessee shall have acknowledged its liability for such claim hereunder, provided that Owner Lessee shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner Lessee has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessee pursuant to this Section 8.3 9.3 without the written permission of OwnerLessee, Owner’s Lessee's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c9.3.4(c), and subject to Section 8.3.4(c9.3.4(c), such Tax Indemnitee shall repay to Owner Lessee any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.39.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s Lessee's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 9.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner Lessee any amount previously paid or advanced by Owner Lessee pursuant to this Section 8.3 9.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner Lessee the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 7 contracts

Samples: Participation Agreement (Continental Airlines Inc /De/), Participation Agreement (Continental Airlines Inc /De/), Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s 's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 7 contracts

Samples: Note Purchase Agreement (United Airlines, Inc.), Note Purchase Agreement (United Airlines, Inc.), Note Purchase Agreement (United Airlines, Inc.)

Contest. (a1) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Borrower could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner Borrower could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice notify Borrower in writing of such claim (provided, that failure so to so notify Owner Borrower shall not relieve Owner Borrower of its indemnity obligations hereunder except to the extent that such failure increases the amount of Taxes subject to such claim as the result of the imposition of penalties or interest or unless such the failure to notify effectively forecloses OwnerBorrower’s rights to require a successfully contest of such claim) ), and shall take no action with respect to such claim without the Borrower’s prior written consent of Owner for 30 thirty (30) days following the Borrower’s receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest)notice. In addition, such Tax Indemnitee shall (provided, provided that Owner Borrower shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Borrower with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Borrower may be required to indemnify hereunder. If requested by Owner Borrower in writing within 30 thirty (30) days after its receipt of such notice, such Tax Indemnitee shall, at the Borrower’s expense of Owner (including, without limitation, including all reasonable costsout-of-pocket costs and expenses, expenses and including reasonable attorneys’ and accountants’ fees and disbursementsdisbursements incurred in connection with, and reasonably allocable to, the contest of such Tax), in good faith contest (or, if permitted by applicable lawlaw and to the extent provided below, allow Owner Borrower to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceedingproceeding (with the determination of which alternative to be used made in the sole discretion of the party controlling the contest). If requested to do so by OwnerBorrower, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If Borrower shall have the right, at its cost and expense, (A) in any judicial or administrative proceeding that involves an indemnified Tax and other Taxes which do not involve such Tax Indemnitee, to assume responsibility for and control of the extent the defense thereof, (B) in any judicial or administrative proceeding that involves an indemnified Tax and other Taxes asserted against such Tax Indemnitee is able to separate the contested issue related or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutAgreements, (x) to assume responsibility for and control of the defense of such indemnified Tax to the extent that the same may be and is severed from such other claims (and such Tax Indemnitee shall use its reasonable efforts to obtain such severance) or (y) if such indemnified Tax is not severable from other claims with respect to Taxes asserted against such Tax Indemnitee that are material to such Tax Indemnitee, to assume responsibility for and control of the defense of such indemnified Tax if such assumption would not, in such Tax Indemnitee’s reasonable judgment, prejudice or impair in any material respect, such Tax Indemnitee’s management of such other claims and (C) in any other case, to be consulted by such Tax Indemnitee and in which case such Tax Indemnitee agrees to cooperate with reasonable requests of Borrower, each such request at Borrower’s cost and expense, with respect to judicial proceedings subject to the control of such Tax Indemnitee and to be allowed, at Borrower’s cost and expense, to participate therein. The Tax Indemnitee may participate at its own cost and expense and with its own counsel in any judicial proceeding controlled by Borrower pursuant to the preceding provisions; provided that such Tax Indemnitee’s participation does not, in Borrower’s reasonable judgment, prejudice or impair in any material respect the defense and management of such case. Borrower shall not be entitled to control the defense of any such judicial or administrative proceeding (and the relevant Tax Indemnitee shall be entitled to assume such control) if such proceedings are likely to entail any risk of criminal liability or material risk of civil liability being imposed on such Tax Indemnitee that, in the good faith judgment case of civil liability in the reasonable opinion of such Tax Indemnitee, adversely affecting affects in any material respect the business reputation of such Tax Indemnitee or if, in the reasonable opinion of such Tax Indemnitee, such Tax Indemnitee shall permit Owner control by Borrower would be inappropriate due to control the conduct a conflict of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contestinterest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 9.3(e) (including, without limitation, including any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the Borrower’s prior written consent of the Owner (except as contemplated by Section 8.3.4(bSections 9.3(e)(2) or (c3), which consent may not be unreasonably withheld). (b2) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Borrower to pursue any contest) unless (iA) Owner shall have agreed Borrower agrees to pay such Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses incurred by that such Tax Indemnitee incurs in connection with contesting such Taxes, including, without limitation, including all reasonable out of out-of-pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, in each case, to the extent reasonably allocable to the contest of such Taxes, (iiB) if such contest shall involve involves the payment of the claim, Owner shall advance Borrower advances the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are is required to be paid prior to before commencing the commencement of such contest on an interest-free afterAfter-Tax basis Basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Borrower any net realized tax benefits resulting from such advance advance, including any tax benefits Tax Benefits resulting from making such payment), (iiiC) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale sale, or loss of the Aircraft (unless Owner shall have made Borrower makes provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to shall notify Owner Borrower in writing promptly after it becomes aware of any such risk), (ivD) no Lease Event of Default shall have occurred and be continuing exists, unless Owner Borrower has provided security for its obligations hereunder by advancing to such Tax Indemnitee Indemnitee, before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (vE) prior Borrower has acknowledged in writing its obligations to commencing any judicial action controlled by Ownerindemnify the Tax Indemnitee for the Tax to be contested; provided, Owner shall have acknowledged its liability for such claim hereunderhowever, provided that Owner shall Borrower will not be bound by its the acknowledgment of liability if the Final Determination articulates conclusions contest is resolved on a basis that clearly establishes that Borrower would not have been liable to the Tax Indemnitee under this Agreement in the absence of law and fact that demonstrate that Owner has no liability for the contested amounts hereundersuch acknowledgment. Notwithstanding the foregoing, if any Tax Indemnitee shall releasereleases, waivewaives, compromise compromises, or settle settles any claim which that may be indemnifiable by Owner Borrower pursuant to this Section 8.3 9.3 without the Borrower’s written permission of Owner(which permission may not be unreasonably withheld), OwnerBorrower’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly directly-related claims claims, and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner Borrower any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax. (c3) Notwithstanding anything contained in this Section 8.39.3, a Tax Indemnitee will not be required to contest the imposition of any Tax Tax, and shall be permitted to settle or compromise any claim without OwnerBorrower’s consent consent, if such Tax Indemnitee (iA) shall waive waives its right to indemnity under this Section 8.3 9.3 with respect to such Tax (and any directly directly-related claim claim, and any claim the outcome of which is determined based upon the outcome of such claim), and (iiB) shall pay pays to Owner Borrower any amount previously paid or advanced by Owner Borrower pursuant to this Section 8.3 9.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 6 contracts

Samples: Loan Agreement (Airtran Holdings Inc), Loan Agreement (Airtran Holdings Inc), Loan Agreement (Airtran Holdings Inc)

Contest. (a) If a written claim is made against a any Tax Indemnitee for any Indemnified Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if (a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder"Claim"), such Tax Indemnitee shall will, as promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if as practical after such Tax Indemnitee has received written notification of such Claim, give Borrower written notice of such Claim; provided that, that a failure to give such notice in a timely manner shall be required by law to take action prior not preclude a Claim for indemnification hereunder except to the end extent that the Borrower is prejudiced as a result of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) give such Tax Indemnitee shall take any action so required in connection with so paying the Tax notice in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereundertimely fashion. If requested by Owner Borrower so requests in writing within 30 thirty (30) calendar days after its receipt of such notice, such Tax Indemnitee shall, at shall consult with Borrower to consider what action may be taken to resist payment of the expense of Owner (including, without limitation, all reasonable costs, expenses relevant Indemnified Taxes and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of following such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the consultation such Tax Indemnitee shall appeal may take any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising reasonable action in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment name of such Tax Indemnitee, adversely affecting such Tax Indemnitee, Indemnitee to contest the Claim in the name of such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is or, in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing's sole discretion, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxesthe name of Borrower, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interestpermitted by law; provided that, penalties and additions to tax with respect thereto that the following conditions are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee met: (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iiiA) such Tax Indemnitee shall have reasonably determined that received adequate provision satisfactory to it for such Claim and any liability, expense or loss arising out of or related to such contest (including without limitation indemnification for all costs, expenses, losses, reasonable legal and accounting fees and disbursements, penalties and interest); (B) the action to be taken contest will not result in any material risk danger of forfeiturethe sale, sale forfeiture or loss of of, or the Aircraft (unless Owner shall have made provisions to protect the interests creation of any such Tax Indemnitee Lien on, the Aircraft, any Engine, any Part, or any interest therein unless bonded in a manner reasonably satisfactory and amount acceptable to the Tax Indemnitees; (C) if such Tax Indemnitee) contest shall be conducted in a manner requiring the payment of the Claim, Borrower shall have paid such Claim to the extent required; (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivD) no Lease Default or Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and continuing; (vE) prior to commencing any judicial action controlled by Owneradministrative appeal, Owner Borrower shall have acknowledged its liability for to such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability Tax Indemnitee hereunder for the contested amounts hereunderamount; (F) such Tax Indemnitee shall have received a legal opinion (at the expense of Borrower) from counsel selected by such Tax Indemnitee (and reasonably satisfactory to Borrower) indicating that a reasonable basis for such contest exists; and (G) such Tax Indemnitee has not received, or does not receive, an opinion from its external tax advisor concluding that the proposed actions to contest such Claim would trigger a significant possibility of creating a local franchise issue of the Tax Indemnitee (e.g., adverse publicity or impairing of the Tax Indemnitee's relationship with local regulators) or impairing the status of other open tax matters (e.g., tax audits) between such Tax Indemnitee and the local taxing authorities. Notwithstanding the foregoingforegoing provisions of this Section 8(b)(iii), if any no Tax Indemnitee shall releasebe obligated to contest a Claim to the United States Supreme Court. In addition, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to notwithstanding the foregoing provisions of this Section 8.3 without the written permission of Owner8(b), Owner’s obligation to indemnify if at any time such Tax Indemnitee with waives its right of indemnification under this Section 8(b) in respect to such claim (and all directly related claims and claims based on the outcome of a Claim, or if, after having received payment of indemnification from Borrower hereunder in respect of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c)Claim, such Tax Indemnitee tenders such payment to Borrower, then Borrower shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required entitled to contest the imposition of contest, or to continue to contest, any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such TaxClaim.

Appears in 4 contracts

Samples: Credit Agreement (Frontier Airlines Inc /Co/), Credit Agreement (Frontier Airlines Inc /Co/), Credit Agreement (Frontier Airlines Inc /Co/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Lessee could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (provided, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by OwnerLessee; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that that, in its good faith opinion, is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable lawlaw to be contested by the Lessee in its own name, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any contest such proceeding matter in its own name, if permitted by applicable law, and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contestcontest (other than such Tax Indemnitee's federal income tax returns). In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.such

Appears in 3 contracts

Samples: Participation Agreement (Continental Airlines Inc /De/), Participation Agreement (Continental Airlines Inc /De/), Participation Agreement (Continental Airlines Inc /De/)

Contest. (a1) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Borrower could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner Borrower could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice notify Borrower in writing of such claim (provided, that failure so to so notify Owner Borrower shall not relieve Owner Borrower of its indemnity obligations hereunder except to the extent that such failure increases the amount of Taxes subject to such claim as the result of the imposition of penalties or interest or unless such the failure to notify effectively forecloses OwnerBorrower’s rights to require a successfully contest of such claim) ), and shall take no action with respect to such claim without the Borrower’s prior written consent of Owner for 30 thirty (30) days following the Borrower’s receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest)notice. In addition, such Tax Indemnitee shall (provided, provided that Owner Borrower shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Borrower with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Borrower may be required to indemnify hereunder. If requested by Owner Borrower in writing within 30 thirty (30) days after its receipt of such notice, such Tax Indemnitee shall, at the Borrower’s expense of Owner (including, without limitation, including all reasonable costsout-of-pocket costs and expenses, expenses and including reasonable attorneys’ and accountants’ fees and disbursementsdisbursements incurred in connection with, and reasonably allocable to, the contest of such Tax), in good faith contest (or, if permitted by applicable lawlaw and to the extent provided below, allow Owner Borrower to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceedingproceeding (with the determination of which alternative to be used made in the sole discretion of the party controlling the contest). If requested to do so by OwnerBorrower, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If Borrower shall have the right, at its cost and expense, (A) in any judicial or administrative proceeding that involves an indemnified Tax and other Taxes which do not involve such Tax Indemnitee, to assume responsibility for and control of the extent the defense thereof, (B) in any judicial or administrative proceeding that involves an indemnified Tax and other Taxes asserted against such Tax Indemnitee is able to separate the contested issue related or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutAgreements, (x) to assume responsibility for and control of the defense of such indemnified Tax to the extent that the same may be and is severed from such other claims (and such Tax Indemnitee shall use its reasonable efforts to obtain such severance) or (y) if such indemnified Tax is not severable from other claims with respect to Taxes asserted against such Tax Indemnitee that are material to such Tax Indemnitee, to assume responsibility for and control of the defense of such indemnified Tax if such assumption would not, in such Tax Indemnitee’s reasonable judgment, prejudice or impair in any material respect, such Tax Indemnitee’s management of such other claims and (C) in any other case, to be consulted by such Tax Indemnitee and in which case such Tax Indemnitee agrees to cooperate with reasonable requests of Borrower, each such request at Borrower’s cost and expense, with respect to judicial proceedings subject to the control of such Tax Indemnitee and to be allowed, at Borrower’s cost and expense, to participate therein. The Tax Indemnitee may participate at its own cost and expense and with its own counsel in any judicial proceeding controlled by Borrower pursuant to the preceding provisions; provided that such Tax Indemnitee’s participation does not, in Borrower’s reasonable judgment, prejudice or impair in any material respect the defense and management of such case. Borrower shall not be entitled to control the defense of any such judicial or administrative proceeding (and the relevant Tax Indemnitee shall be entitled to assume such control) if such proceedings are likely to entail any risk of criminal liability or material risk of civil liability being imposed on such Tax Indemnitee that, in the good faith judgment case of civil liability in the reasonable opinion of such Tax Indemnitee, adversely affecting affects in any material respect the business reputation of such Tax Indemnitee or if, in the reasonable opinion of such Tax Indemnitee, such Tax Indemnitee shall permit Owner control by Borrower would be inappropriate due to control the conduct a conflict of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contestinterest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 10(c)(v) (including, without limitation, including any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the Borrower’s prior written consent of the Owner (except as contemplated by Section 8.3.4(bSections 10(c)(v)(2) or (c3), which consent may not be unreasonably withheld). (b2) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Borrower to pursue any contest) unless unless (i1) Owner shall have agreed Borrower agrees to pay such Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses incurred by that such Tax Indemnitee incurs in connection with contesting such Taxes, including, without limitation, including all reasonable out of out-of-pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, in each case, to the extent reasonably allocable to the contest of such Taxes, (ii2) if such contest shall involve involves the payment of the claim, Owner shall advance Borrower advances the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are is required to be paid prior to before commencing the commencement of such contest on an interest-free afterAfter-Tax basis Basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Borrower any net realized tax benefits Tax Benefits resulting from such advance advance, including any tax benefits Tax Benefits resulting from making such payment), (iii3) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale sale, or loss of the Aircraft Collateral (unless Owner shall have made Borrower makes provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to shall notify Owner Borrower in writing promptly after it becomes aware of any such risk), (iv4) no Lease Event of Default shall have occurred and be continuing exists, unless Owner Borrower has provided security for its obligations hereunder by advancing to such Tax Indemnitee Indemnitee, before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v5) prior Borrower has acknowledged in writing its obligations to commencing any judicial action controlled by Ownerindemnify the Tax Indemnitee for the Tax to be contested; provided, Owner shall have acknowledged its liability for such claim hereunderhowever, provided that Owner shall Borrower will not be bound by its the acknowledgment of liability if the Final Determination articulates conclusions contest is resolved on a basis that clearly establishes that Borrower would not have been liable to the Tax Indemnitee under this Agreement in the absence of law and fact that demonstrate that Owner has no liability for the contested amounts hereundersuch acknowledgment. Notwithstanding the foregoing, if any Tax Indemnitee shall releasereleases, waivewaives, compromise compromises, or settle settles any claim which that may be indemnifiable by Owner Borrower pursuant to this Section 8.3 10(c) without the Borrower’s written permission of Owner(which permission may not be unreasonably withheld), OwnerBorrower’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly directly-related claims claims, and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner Borrower any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax. (c3) Notwithstanding anything contained in this Section 8.310(c), a Tax Indemnitee will not be required to contest the imposition of any Tax Tax, and shall be permitted to settle or compromise any claim without OwnerBorrower’s consent consent, if such Tax Indemnitee (i1) shall waive waives its right to indemnity under this Section 8.3 10(c) with respect to such Tax (and any directly directly-related claim claim, and any claim the outcome of which is determined based upon the outcome of such claim), and (ii2) shall pay pays to Owner Borrower any amount previously paid or advanced by Owner Borrower pursuant to this Section 8.3 10(c) with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Credit Agreement (Airtran Holdings Inc), Credit Agreement (Airtran Holdings Inc)

Contest. (a) If a written claim is made against a any Tax Indemnitee for any Indemnified Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if (a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder"Claim"), such Tax Indemnitee shall will, as promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if as practical after such Tax Indemnitee has received written notification of such Claim, give Borrower written notice of such Claim; provided that, that a failure to give such notice in a timely manner shall be required by law to take action prior not preclude a Claim for indemnification hereunder except to the end extent that the Borrower is prejudiced as a result of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) give such Tax Indemnitee shall take any action so required in connection with so paying the Tax notice in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereundertimely fashion. If requested by Owner Borrower so requests in writing within 30 thirty (30) calendar days after its receipt of such notice, such Tax Indemnitee shall, at shall consult with Borrower to consider what action may be taken to resist payment of the expense of Owner (including, without limitation, all reasonable costs, expenses relevant Indemnified Taxes and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of following such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the consultation such Tax Indemnitee shall appeal may take any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising reasonable action in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment name of such Tax Indemnitee, adversely affecting such Tax Indemnitee, Indemnitee to contest the Claim in the name of such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is or, in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing's sole discretion, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxesthe name of Borrower, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interestpermitted by law; provided that, penalties and additions to tax with respect thereto that the following conditions are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee met: (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iiiA) such Tax Indemnitee shall have reasonably determined that received adequate provision satisfactory to it for such Claim and any liability, expense or loss arising out of or related to such contest (including without limitation indemnification for all costs, expenses, losses, reasonable legal and accounting fees and disbursements, penalties and interest); (B) the action to be taken contest will not result in any material risk danger of forfeiturethe sale, sale forfeiture or loss of of, or the Aircraft (unless Owner shall have made provisions to protect the interests creation of any such Tax Indemnitee Lien on, any Aircraft, any Engine, any Part, or any interest therein unless bonded in a manner reasonably satisfactory and amount acceptable to the Tax Indemnitees; (C) if such Tax Indemnitee) contest shall be conducted in a manner requiring the payment of the Claim, Borrower shall have paid such Claim to the extent required; (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivD) no Lease Default or Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and continuing; (vE) prior to commencing any judicial action controlled by Owneradministrative appeal, Owner Borrower shall have acknowledged its liability for to such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability Tax Indemnitee hereunder for the contested amounts hereunderamount; (F) such Tax Indemnitee shall have received a legal opinion (at the expense of Borrower) from counsel selected by such Tax Indemnitee (and reasonably satisfactory to Borrower) indicating that a reasonable basis for such contest exists; and (G) such Tax Indemnitee has not received, or does not receive, an opinion from its external tax advisor concluding that the proposed actions to contest such Claim would trigger a significant possibility of creating a local franchise issue of the Tax Indemnitee (e.g., adverse publicity or impairing of the Tax Indemnitee's relationship with local regulators) or impairing the status of other open tax matters (e.g., tax audits) between such Tax Indemnitee and the local taxing authorities. Notwithstanding the foregoingforegoing provisions of this Section 8(b)(iii), if any no Tax Indemnitee shall releasebe obligated to contest a Claim to the United States Supreme Court. In addition, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to notwithstanding the foregoing provisions of this Section 8.3 without the written permission of Owner8(b), Owner’s obligation to indemnify if at any time such Tax Indemnitee with waives its right of indemnification under this Section 8(b) in respect to such claim (and all directly related claims and claims based on the outcome of a Claim, or if, after having received payment of indemnification from Borrower hereunder in respect of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c)Claim, such Tax Indemnitee tenders such payment to Borrower, then Borrower shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required entitled to contest the imposition of contest, or to continue to contest, any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such TaxClaim.

Appears in 2 contracts

Samples: Credit Agreement (Frontier Airlines Inc /Co/), Credit Agreement (Frontier Airlines Inc /Co/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Lessee could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (provided, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by OwnerLessee; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.Section

Appears in 2 contracts

Samples: Participation Agreement (Continental Airlines Inc /De/), Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)).. PARTICIPATION AGREEMENT (2012-2) 30 (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Note Purchase Agreement (Us Airways Inc), Participation Agreement (Us Airways Inc)

Contest. (a) If any Indemnitee receives a written claim is made against from any taxing authority for any Indemnified Tax (a Tax Claim”), such Indemnitee for Taxes shall give Lessee written notice of such Tax Claim within fifteen (15) Business Days after such Indemnitee receives such Tax Claim. (b) If reasonably requested by Lessee in a written notice delivered to such Indemnitee within thirty (30) days after the date on which such Indemnitee gives the notice required by Section 21.7(a) with respect to which Owner could a Tax Claim, and if the conditions described in Section 21.7(c) are satisfied and continue to be liable satisfied at all times during the contest, such Indemnitee shall contest such Tax Claim (or, at the option of such Indemnitee, may permit Lessee to contest such Tax Claim in the name of Lessee or in the name of such Indemnitee), in each case at Lessee’s expense, in accordance with applicable Law, and in a manner determined and controlled by the party that is conducting such contest (for example, by contesting the validity, applicability or amount of the Indemnified Taxes that are the subject of such Tax Claim by resisting payment or indemnity hereunderof such Indemnified Taxes, or by paying such Indemnified Taxes under protest if protest is necessary and proper, or by paying such Indemnified Taxes and using reasonable efforts to obtain a Tax refund thereof), and such Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, shall not settle or compromise such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action Claim or refrain from taking any allowable appeal from any adverse administrative or judicial determination with respect to such claim Tax Claim without the prior written consent of Owner for 30 days following the receipt of Lessee (which consent shall not be unreasonably withheld), provided that such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice have the right to contest refuse to begin or continue (Bor to permit Lessee to begin or continue) the failure contest of any or all of the Indemnified Taxes that are the subject of such Tax Claim if such Indemnitee (x) waives in writing its right under this Article 21 to so pay would result in criminal penalties be indemnified for the Indemnified Taxes which such Indemnitee declines to contest and (iiy) repays to Lessee the amount (if any) which Lessee previously advanced to such Indemnitee in accordance with Section 21.7(c)(iv) with respect to the Indemnified Taxes that such Indemnitee declines to contest. Any request by Lessee to contest a Tax Claim pursuant to this Section 21.7 shall constitute an acknowledgment and agreement by Lessee that the Taxes which are the subject of such Tax Claim are Indemnified Taxes and that Lessee shall pay on demand and on an After-Tax Basis all costs and expenses paid or incurred by such Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt conduct of such notice, such Tax Indemnitee shall, at the expense of Owner contest (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.), Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.)

Contest. (ai) If a written claim is made by any taxing authority against a Tax an Indemnitee or an Affiliate thereof for any Taxes with respect to which Owner could the Lessee may be liable for payment or indemnity hereunder, or if hereunder (a "Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunderClaim"), such Tax Indemnitee shall promptly give Owner the Lessee written notice in writing of such claim Tax Claim as soon as practicable (providedand in all events within 30 days), and shall furnish the Lessee with copies of such Tax Claim and all other writings received from the taxing authority to the extent relating to such Tax Claim, provided that failure so to so notify Owner the Lessee shall not relieve Owner the Lessee of its indemnity obligations any obligation to indemnify the Indemnitee hereunder unless except to the extent that such failure precludes the Lessee's ability to notify effectively forecloses Owner’s rights to require conduct a contest of such claim) and Taxes (provided further, that the Lessee shall take no action with respect have the right to bring suit for damages resulting from any such claim without failure). Subject to Section 9.2(d)(iii), the prior written consent Lessee shall be entitled for a period of Owner for 30 days following from the receipt of such written notice (or such shorter period as is reasonably specified by Owner; provided, that, in the case lndemnitee if any contest of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall the Taxes must be required by law to take action commenced prior to the end expiration of thirty days) to request in writing that the Indemnitee contest the imposition of such 30-day period, Taxes at the Lessee's sole cost and expense and the Indemnitee shall not pay such Tax within such period. The Indemnitee shall, in such notice to Owner, so inform Owner, and shall not pay such Tax Claim until at least 30 days after providing the Lessee with such written notice unless (a) the Indemnitee shall take no action for as long as it is legally able required to do so by law or regulation and (it being understood that a Tax b) in the written notice described above, the Indemnitee shall has notified the Lessee of such requirement. (ii) Subject to Section 9.2(d)(iii), the Lessee will be entitled to pay contest (acting through counsel selected by the Lessee and reasonably satisfactory to the Indemnitee), and control the contest of, any Tax Claim in good faith if (i) the contest of the Tax claimed and xxx for a refund prior to Claim may be pursued in the end name of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and Lessee; (ii) such Tax Claim must be pursued in the name of the Indemnitee but may be pursued independently from Tax Claims for which the Lessee is not obligated to indemnify the Indemnitee (with each Indemnitee agreeing to cooperate with the Lessee in its reasonable efforts to sever the contest of any indemnified Tax from the contest of the unindemnified Tax, so that the Lessee may control the contest of the indemnified Tax); or (iii) the Indemnitee requests in writing that the Lessee control such contest. In the case of all other Tax Claims, the Indemnitee shall take any action so required in connection with so paying contest the Tax Claim including seeking judicial review of any adverse administrative determination as requested by the Lessee, and appealing any adverse judicial determination except as otherwise provided in a manner that is Section 9.2(d)(iii), and the least prejudicial Indemnitee shall control the contest of such Tax Claim in good faith (acting through counsel selected by the Indemnitee and reasonably satisfactory to the pursuit Lessee). (iii) In the case of any contest pursuant to clause (i) or (ii) above, the Lessee shall use reasonable efforts to contest such claim in its own name and the Indemnitee shall use reasonable efforts to allow the Lessee to contest such claim in the name of the contest)Lessee. In additionthe case of a Tax Claim contested by the Lessee in the Lessee's name, such Tax the Lessee shall consult in good faith with, and keep reasonably informed, the Indemnitee and its counsel and shall (provided, that Owner shall have agreed to keep such information confidential other than to provide the extent necessary in order to contest the claim) furnish Owner Indemnitee with copies of any requests for information from documents, reports or claims issued by or sent to the relevant auditing agent or taxing authority, but the decisions regarding what actions to be taken shall be made by the Lessee in its sole judgment. In the case of all other Tax Claims, the Indemnitee shall contest the Tax Claim at the Lessee's sole cost and expense if the Lessee shall request the (1) the Indemnitee will control the contest (and all decisions with respect to such contest shall be made in its sole judgment exercised in good faith) acting through counsel selected by the Indemnitee and reasonably satisfactory to the Lessee; (2) at the Lessee's written request, if payment is made to the applicable tax authority, the Indemnitee shall use all reasonable efforts to obtain a refund thereof in appropriate administrative or judicial proceedings; (3) the Indemnitee conducting such contest shall consult with and keep reasonably informed the Lessee and its designated counsel with respect to such Tax Claim, shall provide the Lessee with copies of any Taxing Authority documents, reports or claims issued by or sent to the relevant auditing agent or taxing authority to the extent relating to such Taxes with respect Tax Claim (provided that the Indemnitee shall have the right to which Owner may be required redact items relating to indemnify hereunder. If requested by Owner in writing within 30 days after the privileged or unrelated tax matters of the Indemnitee or its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses Affiliates) and reasonable attorneys’ and accountants’ fees and disbursements), shall consult in good faith contest with the Lessee regarding any request (or, a) to resist payment of Taxes if permitted by applicable law, allow Owner to contest) through appropriate administrative practical and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (IIb) not paying the same to pay such Tax except under protest if protest is necessary and proper proper, but the decision regarding what actions to be taken shall be made by the Indemnitee in its sole judgment. (iv) Notwithstanding the foregoing, no contest with respect to a Tax Claim will be required or (III) if permitted pursuant to this Section 9.2 and the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee Lessee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue pay the applicable Taxes without contest unless: (1) no Lease Event of Default has occurred and is continuing; (2) there is no material risk of sale, forfeiture or loss of, or the creation of a material Lien (other than a Permitted Lien) on the Project or any appeals portion or Component or Modification thereof unless the Lessee has posted and maintained a bond or other security (taking into account the amount of the Tax Claim and the likelihood of success of a contest) (which may include Adequate Reserves) reasonably satisfactory to the United States Supreme Court. If and relevant Indemnitee or the Taxes shall have been paid as provided in clause (4) below; (3) the contest of such Tax Claim does not involve a risk of imposition of any criminal liability on the Indemnitee; (4) if such contest involves payment of the Tax, the Lessee either advances to the extent Indemnitee on an interest-free basis with no after-tax cost to such Indemnitee (a "Tax Advance") or pays, on an After-Tax Basis to such Indemnitee, the amount payable by the Lessee pursuant to Section 9.2(a) with respect to such Tax; (5) the Lessee shall have agreed to pay and shall pay to such Indemnitee on an After-Tax Basis all reasonable out-of-pocket costs and expenses that the Indemnitee is able to separate may incur in connection with the contested issue or issues from other issues arising contest of such Tax Claim (including all reasonable legal, accounting and investigatory fees and disbursements); (6) the amount of the Taxes in controversy, taking into account the same administrative or judicial proceeding that are unrelated amount of all similar and logically related Taxes with respect to the transactions contemplated by the Operative Agreements withoutDocuments that could be raised in any other year (including any future year) not barred by the statute of limitations, exceeds $25,000; (7) the contest would not require the Indemnitee to extend the statute of limitations in respect of other Taxes not indemnifiable by the Lessee hereunder; (8) the Indemnitee has been provided at the Lessee's expense with an opinion of independent tax counsel selected by the Lessee and reasonably acceptable to the Indemnitee to the effect that there is a Reasonable Basis for contesting such Tax Claim; (9) in the good faith judgment case of such Tax a judicial appeal, no appeal to the U.S. Supreme Court shall be required of the Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner ; and (at Owner’s cost and expense10) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax conducted in the name of an Indemnitee, such Tax the Lessee shall have delivered to the Indemnitee shall consult with Owner in good faith regarding the manner a written acknowledgement of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by its liability under this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting 9.2 for such Taxes, includingprovided however, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if that such contest acknowledgement shall involve the payment of the claim, Owner shall advance the amount thereof (not be required other than to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale basis for the taxing authority's claim is or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner becomes reasonably satisfactory to such Tax Indemnitee) (providedclear; provided further, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner Lessee shall not be bound by its acknowledgment acknowledgement of liability if the Final Determination articulates conclusions contest is resolved on the basis of law and fact a written opinion of the adjudicator that demonstrate clearly indicates that Owner the basis for the conclusion is one for which the Lessee has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 9.2 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Participation Agreement (Ormat Technologies, Inc.), Participation Agreement (Ormat Technologies, Inc.)

Contest. If the Company notifies the Executive in writing, within sixty (a60) If a written business days following receipt from the Executive of notification of the IRS claim, that it desires to contest such claim, the Executive shall: (i) Give the Company any information reasonably requested by the Company relating to such claim; (ii) Take such action in connection with contesting such claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee as the Company shall promptly give Owner notice reasonably request in writing of such claim (providedfrom time to time including, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action without limitation, accepting legal representation with respect to such claim without by an attorney selected by the prior written consent of Owner for 30 days following Company and reasonably acceptable to the receipt Executive; (iii) Cooperate with the Company in good faith in order to effectively contest such claim; and (iv) Permit the Company to participate in any proceedings relating to such claim if the Company elects not to assume and control the defense of such notice by Ownerclaim; provided, thathowever, that the Company 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 harmless the Executive, on an after-tax basis, for any Excise Tax and Income Taxes (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8, the Company shall have the right, at its sole option, to assume the control of all proceedings in connection with such contest, in which case it may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with the case taxing authority in respect of such claim, and may direct the Executive to xxx for a refund or contest the claim made against in any permissible manner, and the Executive agrees to prosecute such contest to a Tax Indemniteedetermination before any administrative tribunal, if in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; and provided further, however, that any extension of the statute of limitations relating to payment of tax for the taxable year of the Executive with respect to which such Tax Indemnitee contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s rights to assume the control of the contest shall be required by law limited to take action prior issues with respect to the end of such 30-day period, such which an Excise Tax Indemnitee shall, in such notice to Owner, so inform OwnerAdjustment Payment would be payable hereunder, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee the Executive shall be entitled to pay settle or contest, as the Tax claimed and xxx for a refund prior case may be, any other issue raised by the IRS or any other taxing authority. To the extent that the contest to the end of such 30-day period if (i)(A) IRS claim is successful, the failure to so pay the Excise Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial Adjustment Payment related to the pursuit element of compensation and/or benefit that was the subject of the contest). In addition, such Tax Indemnitee claim shall (provided, that Owner shall have agreed to keep such information confidential other than to be recalculated in accordance with the extent necessary in order to contest the claim) furnish Owner with copies provisions of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)8(a). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Employment Agreement (Bally Total Fitness Holding Corp), Chief Executive Officer Employment Agreement (Bally Total Fitness Holding Corp)

Contest. If the Company notifies the Executive in writing, within sixty (a60) If a written business days following receipt from the Executive of notification of the IRS claim, that it desires to contest such claim, the Executive shall: (i) Give the Company any information reasonably requested by the Company relating to such claim; (ii) Take such action in connection with contesting such claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee as the Company shall promptly give Owner notice reasonably request in writing of such claim (providedfrom time to time including, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action without limitation, accepting legal representation with respect to such claim without by an attorney selected by the prior written consent of Owner for 30 days following Company and reasonably acceptable to the receipt Executive; (iii) Cooperate with the Company in good faith in order to effectively contest such claim; and (iv) Permit the Company to participate in any proceedings relating to such claim if the Company elects not to assume and control the defense of such notice by Ownerclaim; provided, thathowever, that the Company 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 harmless the Executive, on an after-tax basis, for any Excise Tax and Income Taxes (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8, the Company shall have the right, at its sole option, to assume the control of all proceedings in connection with such contest, in which case it may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with the case taxing authority in respect of such claim, and may direct the Executive to sxx for a refund or contest the claim made against in any permissible manner, and the Executive agrees to prosecute such contest to a Tax Indemniteedetermination before any administrative tribunal, if in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; and provided further, however, that any extension of the statute of limitations relating to payment of tax for the taxable year of the Executive with respect to which such Tax Indemnitee contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s rights to assume the control of the contest shall be required by law limited to take action prior issues with respect to the end of such 30-day period, such which an Excise Tax Indemnitee shall, in such notice to Owner, so inform OwnerAdjustment Payment would be payable hereunder, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee the Executive shall be entitled to pay settle or contest, as the Tax claimed and xxx for a refund prior case may be, any other issue raised by the IRS or any other taxing authority. To the extent that the contest to the end of such 30-day period if (i)(A) IRS claim is successful, the failure to so pay the Excise Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial Adjustment Payment related to the pursuit element of compensation and/or benefit that was the subject of the contest). In addition, such Tax Indemnitee claim shall (provided, that Owner shall have agreed to keep such information confidential other than to be recalculated in accordance with the extent necessary in order to contest the claim) furnish Owner with copies provisions of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)8(a). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Settlement Agreement (Bally Total Fitness Holding Corp), Employment Agreement (Bally Total Fitness Holding Corp)

Contest. (a1) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Borrower could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner Borrower could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice notify Borrower in writing of such claim (provided, that failure so to so notify Owner Borrower shall not relieve Owner Borrower of its indemnity obligations hereunder unless except to the extent that such failure to notify effectively forecloses Ownerhas a material adverse effect on Borrower’s indemnification obligations hereunder or on Borrower’s rights to require a successfully contest of such claim) ), and shall take no action with respect to such claim without the Borrower’s prior written consent of Owner for 30 days following the Borrower’s receipt of such notice by Ownernotice; provided, that, in the case of a claim made against a Tax Indemnitee, if applicable Law requires such Tax Indemnitee shall be required by law to take action prior to before the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerBorrower, so inform OwnerBorrower, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest)avoid taking action. In addition, such Such Tax Indemnitee shall (provided, provided that Owner Borrower shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim, such agreement to be delivered to the Tax Indemnitee and in form and substance reasonably acceptable to it) furnish Owner Borrower with copies of the relevant portions of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Borrower may be required to indemnify hereunder. If requested by Owner Borrower in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the Borrower’s expense of Owner (including, without limitation, including all reasonable costsout-of-pocket costs and expenses, expenses and including reasonable attorneys’ and accountants’ fees and disbursementsdisbursements incurred in connection with, and reasonably allocable to, the contest of such Tax), in good faith contest (or, if permitted by applicable lawLaw, allow Owner Borrower to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceeding. If requested to do so by OwnerBorrower in writing, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that the Tax Indemnitee is able able, using reasonable efforts, to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, Transactions without (in the good faith judgment of such Tax Indemnitee, ’s good faith judgment) adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Borrower to control the conduct of any such proceeding and shall provide to Owner Borrower (at OwnerBorrower’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is and reasonably necessary to conduct such contest. In If the case of a contest is being controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Borrower in good faith regarding the manner of contesting such claim claim, and shall keep Owner Borrower reasonably informed regarding the progress of such contest. If the contest is being controlled by Borrower, Borrower shall consult with the applicable Tax Indemnitee in good faith regarding the manner of contesting such claim, and shall keep such Tax Indemnitee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 10(c)(v) (including, without limitation, including any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the Borrower’s prior written consent of the Owner (except as contemplated by Section 8.3.4(bSections 10(c)(v)(2) or (c3)). (b2) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Borrower to pursue any contest) unless unless (i1) Owner shall have agreed Borrower agrees to pay such Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses incurred by that such Tax Indemnitee incurs in connection with contesting such Taxes, including, without limitation, including all reasonable out of out-of-pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, in each case, to the extent reasonably allocable to the contest of such Taxes, (ii2) if such contest shall involve involves the payment of the claim, Owner shall advance Borrower advances the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are is required to be paid prior to before commencing the commencement of such contest on an interest-free afterAfter-Tax basis Basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Borrower any net realized tax benefits resulting from such advance advance, including any tax benefits resulting from making such payment), (iii3) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale sale, or loss of, or the creation of a Lien (other than a Permitted Lien) on, the Aircraft Collateral (unless Owner shall have made Borrower makes provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) or any material risk of criminal liability or material civil liability (provided, that such Tax Indemnitee agrees to shall notify Owner Borrower in writing promptly after it becomes aware of any such riskrisks), (iv4) no Lease Event of Default shall have occurred and be continuing exists (unless Owner Borrower has provided security reasonably acceptable to the Tax Indemnitee for its obligations hereunder by advancing or has advanced to such Tax Indemnitee Indemnitee, before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, ) and (v5) prior to before commencing any judicial action controlled by OwnerBorrower, Owner such Tax Indemnitee shall have acknowledged its liability for received written confirmation from Borrower that the Taxes that are the subject of such Tax claim are indemnified by Borrower hereunder, provided provided, that Owner Borrower shall not be bound by its acknowledgment if such confirmation to the extent that the Final Determination of the contest articulates conclusions of law and fact that demonstrate that Owner has no liability Borrower is not liable hereunder for the contested amounts hereunderTaxes that are the subject of such Tax claim. Notwithstanding the foregoing, if any Tax Indemnitee shall releasereleases, waivewaives, compromise compromises, or settle settles any claim which that may be indemnifiable by Owner Borrower pursuant to this Section 8.3 10(c) without the Borrower’s written permission of Ownerpermission, OwnerBorrower’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly directly-related claims claims, and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner Borrower any amount previously paid or advanced to such Tax Indemnitee with respect to such claimclaim (other than previously incurred costs and expenses of contest described in clause (1) of this paragraph), plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax. (c3) Notwithstanding anything contained in this Section 8.310(c), a Tax Indemnitee will not be required to contest the imposition of any Tax Tax, and shall be permitted to settle or compromise any claim without OwnerBorrower’s consent consent, if such Tax Indemnitee (i1) shall waive waives its right to indemnity under this Section 8.3 10(c) with respect to such Tax (and any directly directly-related claim claim, and any claim the outcome of which is determined based upon the outcome of such claim), (ii2) shall pay pays to Owner Borrower any amount previously paid or advanced by Owner Borrower pursuant to this Section 8.3 10(c) with respect to such TaxTax (other than previously incurred costs and expenses of contest described in clause (1) of this paragraph), plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax, and (iii3) shall agree agrees to discuss with Owner Borrower the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Credit Agreement (Airtran Holdings Inc), Credit Agreement (Airtran Holdings Inc)

Contest. (a) If a written claim is made against a any Tax Indemnitee for Taxes with respect any Tax that is subject to which Owner could be liable for payment or indemnity hereunderindemnification under this Clause 9, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly Lessor will give Owner Lessee written notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner Lessee so requests in writing within 30 days after its receipt of such notice, such the relevant Tax Indemnitee shallshall permit Lessee to contest the claim in the name of the Tax Indemnitee or in the name of Lessee, at to the expense of Owner extent permitted by law. However, if such claim together with other claims which could be made with respect to other transactions to which the Tax Indemnitee is then a party could (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursementsif sustained) have an adverse effect on the Tax Indemnitee's business or financial affairs (a "Special Claim"), in good faith contest (or, or if Lessee shall not be permitted by applicable lawlaw to contest a claim (other than a Special Claim) on behalf of the Tax Indemnitee, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, then the Tax Indemnitee shall appeal any adverse administrative or judicial decisioncontest such claim in good faith. Notwithstanding the foregoing, except that no claim shall be contested unless and until: (a) the Tax Indemnitee shall not have received (i) an indemnity reasonably satisfactory to it for all expenses reasonably expected to be required to pursue any appeals to paid in contesting the United States Supreme Court. If claim (including attorneys' and to the extent the Tax Indemnitee accountants' fees and disbursements) and (ii) written acknowledgement by Lessee of its liability hereunder (if such contest is able to separate the contested issue or issues from other issues arising decided adversely) in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment respect of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). Taxes; (b) Notwithstanding the foregoingaction to be taken will not involve any material risk of the sale, in no event shall forfeiture, seizure or loss of, or the creation of any Lien (except a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner Lien which Lessee shall have agreed bonded in an amount and manner reasonably satisfactory to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such TaxesLessor) on, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, the Aircraft or any part thereof or any interest therein; (iic) if such contest shall involve be conducted in a manner requiring the payment of the claim, Owner Lessee shall advance have advanced the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee tax basis; (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivd) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder and Lessor shall be receiving all amounts of Rent when due, without reduction by advancing to reason of any Taxes; and (e) if such claim is a Special Claim, the relevant Tax Indemnitee before proceeding or continuing with such contest, shall have received a legal opinion (at the amount expense of Lessee) from counsel satisfactory to the Tax being contested, plus any interest Indemnitee indicating that a reasonable basis for such contest exists. The relevant Tax Indemnitee and penalties and an amount estimated Lessee shall in good faith by such consider the other party's views regarding the conduct of the contest. The relevant Tax Indemnitee for expensesand Lessee shall provide to each other, upon request, such reasonably obtainable information and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not other reasonable assistance as may be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability necessary or advisable for the contested amounts hereundereffective evaluation or conduct of such contest. Notwithstanding the foregoingforegoing provisions of this Clause 9.4, if at any time any Tax Indemnitee shall releasewaives its right of indemnification under this Clause 9 in respect of a claim, waiveor if, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission after having received payment of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with indemnification from Lessee hereunder in respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) tenders such payment to Lessee, then Lessee shall waive its right not be entitled to indemnity under this Section 8.3 with respect contest, or to such Tax (and continue to contest, any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Aircraft Lease Agreement (Ubics Inc), Aircraft Purchase Agreement (Ubics Inc)

Contest. (a) If Lessor receives a written claim is made against a for an indemnity pursuant to the Head Lease Tax Indemnitee Indemnity Agreement for Taxes with respect which Lessee would be required to which Owner could be liable for payment or pay Lessor an indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee Lessor shall promptly give Owner notice notify Lessee thereof in writing of such claim (provided, but it being understood and agreed that failure of Lessor to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in provide such notice to Owner, so inform Owner, and such Tax Indemnitee Lessee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially adversely affect or otherwise prejudice the any Lessor’s right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contestan indemnity hereunder). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after ten (10) Business Days before the latest day on which Lessor may request a contest pursuant to the Head Lease Tax Indemnity Agreement, Lessor shall exercise its receipt rights, if any, under the Head Lease Tax Indemnity Agreement provided that in no event shall Lessor be required to initiate or continue (or be required to request any other person to initiate or continue) a contest unless: (i) the amount of the obligation on the part of Lessee to indemnify Lessor in respect of the HTIA Liability shall be at least $50,000, (ii) Lessee agrees to reimburse Lessor on demand (and complies with such notice, such Tax Indemnitee shall, at agreement) for all of the expense of Owner Headlease Interests’ and Lessor’s reasonable costs and expenses (including, without limitation, all reasonable costs, expenses legal and reasonable attorneys’ and accountants’ accounting fees and disbursements), ) which each may incur in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of contesting such Taxes by (I) resisting payment thereofdisallowance, (II) not paying the same except under protest if protest is necessary and proper or (IIIiii) if the payment claimant Headlease Interest elects to contest the disallowance by paying the tax claimed (including interest, penalties or additions to tax) and seeking a refund, Lessee shall advance to Lessor on an interest free basis the aggregate amount of taxes, interest, penalties and additions to the tax applicable to such disallowance and agree to indemnify Lessor and such Headlease Interest for any adverse tax consequences resulting from such advance, (iv) such contest would not entail any risk of criminal penalties, (v) with respect to such disallowance, Lessee shall have furnished Lessor at Lessee’s expense, with a written opinion of independent tax counsel selected by Lessor that a Reasonable Basis exists to contest such disallowance and prior to filing any appeal an opinion that a successful outcome on appeal is mademore likely than not and have posted a bond or other security for such appeal, using reasonable efforts (vi) no Default or Event of Default, under any of the Operative Documents by Lessor or the Airline Services Agreement, has occurred and is continuing, and (vii) Lessee shall have delivered to obtain Lessor a refund thereof written acknowledge of Lessee’s obligation to indemnify in an appropriate administrative and/or judicial proceedingfull Lessor pursuant to this Agreement to the extent that the contest is not successful. If requested Lessor shall have no obligation to do so by Owner, the Tax Indemnitee cause any Headlease Interest and no Headlease Interest shall have any obligation to appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals decision of an appellate court to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Engine Lease Agreement (Pinnacle Airlines Corp), Airline Services Agreement (Mair Holdings Inc)

Contest. If the Company notifies the Executive in writing, within sixty (a60) If a written business days following receipt from the Executive of notification of the IRS claim, that it desires to contest such claim, the Executive shall: (i) Give the Company any information reasonably requested by the Company relating to such claim; (ii) Take such action in connection with contesting such claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee as the Company shall promptly give Owner notice reasonably request in writing of such claim (providedfrom time to time including, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action without limitation, accepting legal representation with respect to such claim without by an attorney selected by the prior written consent of Owner for 30 days following Company and reasonably acceptable to the receipt Executive; (iii) Cooperate with the Company in good faith in order to effectively contest such claim; and (iv) Permit the Company to participate in any proceedings relating to such claim if the Company elects not to assume and control the defense of such notice by Ownerclaim; provided, thathowever, that the Company 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 harmless the Executive, on an after-tax basis, for any Excise Tax and Income Taxes (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8, the Company shall have the right, at its sole option, to assume the control of all proceedings in connection with such contest, in which case it may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with the case taxing authority in respect of such claim, and may direct the Executive to xxx for a refund or contest the claim made against in any permissible manner, and the Executive agrees to prosecute such contest to a Tax Indemniteedetermination before any administrative tribunal, if in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; and provided further, however, that any extension of the statute of limitations relating to payment of tax for the taxable year of the Executive with respect to which such Tax Indemnitee contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s rights to assume the control of the contest shall be required by law limited to take action prior issues with respect to the end of such 30-day period, such which an Excise Tax Indemnitee shall, in such notice to Owner, so inform OwnerAdjustment Payment would be payable hereunder, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee the Executive shall be entitled to pay settle or contest, as the Tax claimed and xxx for a refund prior case may be, any other issue -19- raised by the IRS or any other taxing authority. To the extent that the contest to the end of such 30-day period if (i)(A) IRS claim is successful, the failure to so pay the Excise Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial Adjustment Payment related to the pursuit element of compensation and/or benefit that was the subject of the contest). In addition, such Tax Indemnitee claim shall (provided, that Owner shall have agreed to keep such information confidential other than to be recalculated in accordance with the extent necessary in order to contest the claim) furnish Owner with copies provisions of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)8(a). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 2 contracts

Samples: Employment Agreement (Bally Total Fitness Holding Corp), Employment Agreement (Bally Total Fitness Holding Corp)

Contest. If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (a) If including a written claim is made against a notice of such proceeding) for any Tax Indemnitee for Taxes with respect as to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could the Lessee may have an indemnity obligation hereunder, or if any Tax Indemnitee shall determine that any Tax as to which the Lessee may have an indemnity obligation hereunder may be payable, such Tax Indemnitee shall promptly give Owner notice notify the Lessee in writing of such claim (provided, that failure to so notify Owner and shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no any action with respect to such claim claim, proceeding or Tax without the prior written consent of Owner the Lessee for 30 thirty (30) days following the after receipt of such notice by Ownerthe Lessee unless the failure to take action could result in the imposition of penalties or fines or material danger of sale, forfeiture or loss of, or the creation of any Lien on, the Sites or any portion thereof or interest therein; provided, thathowever, in that any failure to provide such notice shall not relieve the case Lessee of any obligation to indemnify any Tax Indemnitee hereunder unless the contest is precluded as a claim made against a result of such failure and such failure arises out of or is caused by the misconduct or negligence (excluding imputed negligence) of such Tax Indemnitee; provided, further, however, that if such Tax Indemnitee shall be required by law or regulation to take action with respect to any such claim, proceeding or Tax prior to the end of such thirty (30-) day period, period such Tax Indemnitee shall, in such notice to Ownerthe Lessee, so inform Owner, the Lessee and such Tax Indemnitee shall not take no any action for as long as it is legally able with respect to do so (it being understood that a such claim, proceeding or Tax without Participation Agreement 57 the consent of the Lessee before the date on which such Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereundertake action. If requested by Owner in writing If, within 30 thirty (30) days after its receipt of such noticenotice (or such shorter period referred to in the preceding sentence), the Lessee shall request in writing that such Tax Indemnitee contest the imposition of such Tax, the Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements)the Lessee, in good faith contest (orincluding by pursuit of appeals, excluding any requirement to appeal to the U.S. Supreme Court), and shall not settle without the Lessee's consent (such consent not to be unreasonably withheld), or if permitted by applicable lawsuch contest can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee (a "Lessee-Controlled Contest"), the Tax Indemnitee shall allow Owner the Lessee to contest) through appropriate administrative and judicial proceedings contest the validity, applicability or amount of such Tax (other than withholding or net income Taxes by indemnifiable hereunder) by, in the sole discretion of the Person conducting such contest: (I1) resisting payment thereof, ; (II2) not paying the same except under protest protest, if protest is shall be necessary and proper or proper; or (III3) if the payment is shall be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If requested to do so by Ownerproceedings; provided, the Tax Indemnitee shall appeal any adverse administrative or judicial decisionhowever, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a such Tax Indemnitee be required to pursue any contest (or permit the Lessee to permit Owner to pursue any contest) unless the imposition of any Tax for which the Lessee may be obligated unless: (it) Owner if a Payment Default or a Lease Event of a Default shall have occurred and be continuing, Lessee shall either (I) provide security for such tax indemnity obligations that is reasonably acceptable to such Tax Indemnitee or (II) pay such Tax, (u) in the case of net income Taxes indemnifiable hereunder, the amount of the claim and all future related claims exceeds $25,000, (v) in the case of net income and non-U.S. withholding Taxes indemnifiable hereunder, the Lessee shall have delivered to the Certificate Holders an opinion of tax counsel chosen by, and reasonably acceptable to, the Certificate Holders to the effect that there is substantial authority to contest such claim, (w) the Lessee shall have acknowledged in writing its liability hereunder if the contest is unsuccessful, (x) the Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by that such Tax Indemnitee shall incur in connection with contesting such Taxes, including, without limitation, claim (including all reasonable out of pocket costs legal and expenses and reasonable attorneys’ and accountants’ accounting fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties disbursements and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such paymentinternally allocated time charges), (iiiy) such Tax Indemnitee the Certificate Holders shall have reasonably determined that the action to be taken will not result in any material risk danger of forfeituresale, sale forfeiture or loss of the Aircraft Sites or any portion thereof or interest therein and (unless Owner z) if such contest shall have made provisions involve payment of the claim, the Lessee shall advance the amount thereof, plus interest, penalties and additions to protect the interests of any Tax with respect thereto, to such Tax Indemnitee in a manner reasonably satisfactory on an interest-free basis and on an After-Tax Basis to such Tax Indemnitee) (provided, that such . The Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated consult in good faith with the Lessee regarding the conduct of any contest controlled by such Tax Indemnitee for expenses, and (v) prior shall allow the Lessee to commencing any judicial action attend all hearings at which unrelated issues are not discussed and to comment upon all related submissions in such Tax Indemnitee-controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law contests and fact that demonstrate that Owner has no liability for the contested amounts hereundervice versa. Notwithstanding the foregoingabove, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant Lessee has reasonably withheld its consent to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3settlement, a Tax Indemnitee may settle and will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent Taxes if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Taxes and shall have Participation Agreement 58 paid to the Lessee any and all funds paid by the Lessee to such Tax Indemnitee with regard to such contested amount (other than those described in clause (x) of this Section 13(f)) plus any interest which the Lessee paid on such funds. Any contest by the Lessee or at the Lessee's request shall be subject to the following requirements: (i) such contest shall be conducted in good faith by appropriate proceedings which have the effect of staying the enforcement of the lien for such Taxes and any directly related claim and any claim the outcome sale, forfeiture or other loss of which is determined based upon the outcome applicable Site during the pendency of such claim)contest, (ii) none of the Lessor, the Owner Trustee, the Agent and the Participants shall pay be subject to Owner any amount previously paid risk of criminal liability or advanced material civil liability by Owner pursuant to this Section 8.3 with respect to virtue of the matters being contested or such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxproceedings, and (iii) shall agree to discuss the Lessee, in accordance with Owner prudent practice, has set aside adequate reserves for the views or positions of any relevant Taxing Authority with respect payment thereof and has provided evidence reasonably acceptable to the imposition Agent, the Lessor and the Participants of such Taxreserves.

Appears in 1 contract

Samples: Participation Agreement (Marchfirst Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft any Pledged Spare Part (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Note Purchase Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made Tenant may, if it shall so desire, contest the validity or amount of any tax or assessment against a Tax Indemnitee for Taxes with respect to the Leased Premises, in which Owner could be liable for event Tenant may defer the payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing thereof during the pendency of such claim (provided, that failure to contest if applicable law so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Ownerpermits; provided, thathowever, in that Tenant shall not allow any tax lien to be foreclosed on the case Leased Premises, and, unless such tax is paid under protest, not later than ten (10) days prior to the date the same shall become delinquent, Tenant shall have (i) deposited with a bank or trust company acceptable to Landlord, an amount sufficient to pay such contested item(s) together with the interest and penalties thereon (as reasonably estimated by Landlord) with written instructions to said bank or trust company to apply such amount to the payment of a claim made against a Tax Indemnitee, if such Tax Indemnitee item(s) when the amount thereof shall be finally fixed and determined (with the remainder to be paid to Tenant), or (ii) provided Landlord with other reasonably acceptable security. Landlord will, at the request of Tenant, cooperate with Tenant in contesting any such taxes or assessments; provided, however, there shall be no expense to Landlord in such cooperation. In the event Landlord is required by law to take join in any action prior or proceeding taken by Tenant to the end contest any such taxes or assessments, Tenant shall indemnify, defend and hold Landlord and Landlord's trustees, beneficiaries, heirs, successors, assigns, agents, employees and representatives harmless from any and all costs, fees (including, but not limited to attorneys' fees), expenses, claims, judgments, orders, liabilities, losses or damage arising out of such 30-day periodaction or proceeding. If, such Tax Indemnitee shallat any time, in such the judgment of Landlord reasonably exercised, it shall become necessary so to do, Landlord, after written notice to OwnerTenant, may, under protest if so inform Ownerrequested by Tenant, and pay such Tax Indemnitee shall take no action for monies as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested prevent the transfer of the Leased Premises to the Xxxxx County Treasurer or the sale of the Leased Premises or any part thereof, or foreclosure of the lien created thereon by Owner in writing within 30 days after its receipt of such noticeitem, and such Tax Indemnitee shallamount shall become immediately due and payable by Tenant to Landlord, together with interest thereon at the expense rate of Owner fifteen percent (including15%) per annum, without limitationand shall constitute additional rent hereunder, all reasonable costs, expenses or at Tenant's option and reasonable attorneys’ at Tenant's sole cost and accountants’ fees and disbursements)expense, in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment lieu thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to Tenant shall obtain a refund thereof lien release bonds in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals amounts equal to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct claims of any such proceeding and shall provide liens or as otherwise required by applicable law to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In obtain the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress full release of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c))liens. (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Boardwalk Casino Inc)

Contest. (aA) If In the event a written claim is shall be made against by the Internal Revenue Service which, if successful, would result in a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due loss for which Owner could Lessee would have an indemnity obligation hereunderliability to Lessor pursuant to this Article 21 of the Lease, Lessor hereby agrees to contest such Tax Indemnitee shall promptly give Owner notice in writing of such claim (claim, provided, that failure that: (i) within thirty (30) days after notice by Lessor to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest the Lessee of such claim, the Lessee shall have requested that such claim be contested; (ii) Lessor at its sole option, may forego any and shall take no action all administrative appeals, proceedings, hearings and conferences with the relevant taxing authority in respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; providedand may, thatat its sole option, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to either pay the Tax tax claimed and xxx sxx for a refund prior in the appropriate forum selected by Lessor or contest such claim in the appropriate forum selected by Lessor; (iii) within thirty (30) days after notice by Lessor to Lessee of such claim, the Lessee shall have furnished Lessor with an opinion of independent tax counsel chosen by the Lessee and acceptable to Lessor, both as to counsel and substance, to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in effect that there is a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order reasonable basis to contest the claim; (iv) furnish Owner with copies of any requests the Lessee shall reimburse Lessor on demand, for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements)liability which Lessor may incur in contesting such claim, in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred which Lessor may incur in contesting claim; (v) the Lessor shall not be obligated to contest any claim unless the amount of such claim exceeds Twenty Five Thousand Dollars ($25,000); and (vi) the Lessor shall not be obligated to contest any claim if an Event of Default has occurred and is continuing. In the event that at any time Lessor shall pay the tax claimed and then seek a refund, the Lessee shall pay to Lessor (as a "prior payment") the amount of such tax and interest, additions to tax and penalties thereon, if any, but not in excess of the amount which the Lessee would be obligated to pay in respect of the related loss under this Article of the Lease. Upon Final Determination of the liabilities of Lessor, or the receipt of a refund by Lessor, Lessor shall offset the amount of such Tax Indemnitee in connection with contesting prior payment against the full amount due, if any, pursuant to the provisions of this Article and either (i) the Lessee shall pay to Lessor within 30 days after notice thereof, any excess of such Taxesfull amount due, includingif any, without limitationover such prior payment, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, or (ii) if Lessor shall repay to the Lessee within 30 days after the later of a receipt of such contest refund or notice of such Final Determination, any excess of such prior payment over such full amount due. Any interest received by Lessor in connec- tion with any refund which is allocable to the indemnified taxes paid by Lessor in respect of which the Lessee had made a prior payment shall involve be for the account of the Lessee. (B) In the case of any such claim, Lessor agrees to notify the Lessee promptly in writing of such claim, agrees not to make payment of the claim, Owner shall advance tax or other liability claimed for at least thirty (30) days after the amount thereof giving of such notice (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are unless specifically required to be paid prior to do so at an earlier date by the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such paymentInternal Revenue Service), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee and agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing cooperate with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated Lessee in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for in order that such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee contested effectively. The Lessee and its counsel shall maintain confidentiality with respect to all such claim (and all directly related claims and claims based on information insofar as is possible, consistent with the outcome conduct of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxcontest hereunder. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Atlantic Coast Airlines Inc)

Contest. (a1) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Borrower could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner Borrower could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice notify Borrower in writing of such claim (provided, that failure so to so notify Owner Borrower shall not relieve Owner Borrower of its indemnity obligations hereunder unless except to the extent that such failure to notify effectively forecloses Ownerhas a material adverse effect on Borrower’s indemnification obligations hereunder or on Borrower’s rights to require a successfully contest of such claim) ), and shall take no action with respect to such claim without the Borrower’s prior written consent of Owner for 30 days following the Borrower’s receipt of such notice by Ownernotice; provided, that, in the case of a claim made against a Tax Indemnitee, if applicable Law requires such Tax Indemnitee shall be required by law to take action prior to before the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerBorrower, so inform OwnerBorrower, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest)avoid taking action. In addition, such Such Tax Indemnitee shall (provided, provided that Owner Borrower shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim, such agreement to be delivered to the Tax Indemnitee and in form and substance reasonably acceptable to it) furnish Owner Borrower with copies of the relevant portions of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Borrower may be required to indemnify hereunder. If requested by Owner Borrower in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the Borrower’s expense of Owner (including, without limitation, including all reasonable costsout-of-pocket costs and expenses, expenses and including reasonable attorneys’ and accountants’ fees and disbursementsdisbursements incurred in connection with, and reasonably allocable to, the contest of such Tax), in good faith contest (or, if permitted by applicable lawLaw, allow Owner Borrower to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceeding. If requested to do so by OwnerBorrower in writing, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that the Tax Indemnitee is able able, using reasonable efforts, to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, Transactions without (in the good faith judgment of such Tax Indemnitee, ’s good faith judgment) adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Borrower to control the conduct of any such proceeding and shall provide to Owner Borrower (at OwnerBorrower’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is and reasonably necessary to conduct such contest. In If the case of a contest is being controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Borrower in good faith regarding the manner of contesting such claim claim, and shall keep Owner Borrower reasonably informed regarding the progress of such contest. If the contest is being controlled by Borrower, Borrower shall consult with the applicable Tax Indemnitee in good faith regarding the manner of contesting such claim, and shall keep such Tax Indemnitee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 9.3(e) (including, without limitation, including any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the Borrower’s prior written consent of the Owner (except as contemplated by Section 8.3.4(bSections 9.3(e)(2) or (c3)). (b2) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Borrower to pursue any contest) unless unless (i1) Owner shall have agreed Borrower agrees to pay such Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses incurred by that such Tax Indemnitee incurs in connection with contesting such Taxes, including, without limitation, including all reasonable out of out-of-pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, in each case, to the extent reasonably allocable to the contest of such Taxes), (ii2) if such contest shall involve involves the payment of the claim, Owner shall advance Borrower advances the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to before commencing the commencement of such contest on an interest-free after-Tax tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Borrower any net realized tax benefits resulting from such advance advance, including any tax benefits resulting from making such payment), (iii3) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale sale, or loss of, or the creation of a Lien (other than a Permitted Lien) on, the Aircraft or the Collateral (unless Owner shall have made Borrower makes provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) or any material risk of criminal liability or material civil liability (provided, that such Tax Indemnitee agrees to shall notify Owner Borrower in writing promptly after it becomes aware of any such riskrisks), (iv4) no Lease Event of Default shall have occurred and be continuing exists (unless Owner Borrower has provided security reasonably acceptable to the Tax Indemnitee for its obligations hereunder by advancing or has advanced to such Tax Indemnitee Indemnitee, before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, ) and (v5) prior to before commencing any judicial action controlled by OwnerBorrower, Owner such Tax Indemnitee shall have acknowledged its liability for received written confirmation from Borrower that the Taxes that are the subject of such Tax claim are indemnified by Borrower hereunder, provided provided, that Owner Borrower shall not be bound by its acknowledgment if such confirmation to the extent that the Final Determination of the contest articulates conclusions of law and fact that demonstrate that Owner has no liability the Borrower is not liable hereunder for the contested amounts hereunderTaxes that are the subject of such Tax claim. . Notwithstanding the foregoing, if any Tax Indemnitee shall releasereleases, waivewaives, compromise compromises, or settle settles any claim which that may be indemnifiable by Owner Borrower pursuant to this Section 8.3 9.3 without the Borrower’s written permission of Ownerpermission, OwnerBorrower’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly directly-related claims claims, and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner Borrower any amount previously paid or advanced to such Tax Indemnitee with respect to such claimclaim (other than previously incurred costs and expenses of contest described in clause (1) of this paragraph), plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax. (c3) Notwithstanding anything contained in this Section 8.39.3, a Tax Indemnitee will not be required to contest the imposition of any Tax Tax, and shall be permitted to settle or compromise any claim without OwnerBorrower’s consent consent, if such Tax Indemnitee (i1) shall waive waives its right to indemnity under this Section 8.3 9.3 with respect to such Tax (and any directly directly-related claim claim, and any claim the outcome of which is determined based upon the outcome of such claim), (ii2) shall pay pays to Owner Borrower any amount previously paid or advanced by Owner Borrower pursuant to this Section 8.3 9.3 with respect to such TaxTax (other than previously incurred costs and expenses of contest described in clause (1) of this paragraph), plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax, and (iii3) shall agree agrees to discuss with Owner Borrower the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Loan Agreement (Airtran Holdings Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other PARTICIPATION AGREEMENT (2011-1) issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax.. PARTICIPATION AGREEMENT (2011-1) (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other PARTICIPATION AGREEMENT (2010-1) issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax.. PARTICIPATION AGREEMENT (2010-1) (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

Contest. (a) If a Lessor will give Lessee written notice if any claim is made against a any Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a any Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial subject to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunderindemnification under Clause 9.1. If requested by Owner Lessee so requests in writing within 30 days after its receipt of such notice, such the relevant Tax Indemnitee shallshall permit Lessee to contest the claim in the name of the Tax Indemnitee or in the name of Lessee, at to the expense extent permitted by law. However, if such claim, whether alone or together with other claims which could be made with respect to other transactions to which the Tax Indemnitee is then a party could (if sustained) have an adverse effect on the Tax Indemnitee’s business or financial affairs (a “Special Claim”), or if Lessee shall not be permitted by law to contest a claim (other than a Special Claim) on behalf of Owner the Tax Indemnitee, then the Tax Indemnitee shall contest such claim in good faith. Notwithstanding the foregoing, no claim shall be contested unless and until: (including, without limitation, a) the Tax Indemnitee shall have received (i) an indemnity reasonably satisfactory to it for all reasonable costs, expenses and reasonable reasonably expected to be paid in contesting the claim (including attorneys’ and accountants’ fees and disbursements), ) and (ii) written acknowledgement by Lessee of its liability hereunder (if such contest is decided adversely) in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount respect of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). Taxes; (b) Notwithstanding the foregoingaction to be taken will not involve any material risk of the sale, in no event shall forfeiture, seizure or loss of, or the creation of any Lien (except a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner Lien which Lessee shall have agreed provided security in an amount and manner reasonably satisfactory to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such TaxesLessor) on, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, the Aircraft or any part thereof or any interest therein; (iic) if such contest shall involve be conducted in a manner requiring the payment of the claim, Owner Lessee shall advance have advanced the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee tax basis; (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivd) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder and Lessor shall be receiving all amounts of Rent when due, without reduction by advancing to reason of any Taxes; and (e) if such claim is a Special Claim, the relevant Tax Indemnitee before proceeding or continuing with such contest, shall have received a legal opinion (at the amount expense of Lessee) from counsel satisfactory to the Tax being contested, plus any interest Indemnitee indicating that a reasonable basis for such contest exists. The relevant Tax Indemnitee and penalties and an amount estimated Lessee shall in good faith by such consider the other party’s views regarding the conduct of the contest. The relevant Tax Indemnitee for expensesand Lessee shall provide to each other, upon request, such reasonably obtainable information and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not other reasonable assistance as may be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability necessary or advisable for the contested amounts hereundereffective evaluation or conduct of such contest. Notwithstanding the foregoingforegoing provisions of this Clause 9.4, if at any time any Tax Indemnitee shall releasewaives its right of indemnification under this Clause 9 in respect of a claim, waiveor if, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission after having received payment of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with indemnification from Lessee hereunder in respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee tenders such payment to Lessee, then Lessee shall not be entitled to contest, or to continue to contest, any such claim. Each Tax Indemnitee shall (ia) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and act in good faith when settling any claim the outcome of which for any Tax that is determined based upon the outcome of such claim), (ii) shall pay subject to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxindemnification under Clause 9.1, and (iiib) shall agree to discuss not settle any such claim without first consulting with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such TaxLessee.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.)

Contest. (a) If Lessor receives a written claim is made against a for an indemnity pursuant to Section 7A of the Participation Agreement or pursuant to the Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due Indemnity Agreement for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax Lessee would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunderpay Lessor an indemnity pursuant to this Article 8A, Lessor shall promptly notify Lessee thereof in writing. If requested by Owner in writing within 30 days after its receipt Lessee by written notice received by Lessor at least four Business Days before the latest date on which Lessor may request or initiate a contest pursuant to Section 7A(g) of such notice, such Tax Indemnitee shall, at the expense Participation Agreement or Section 4 of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee Indemnity Agreement, Lessor shall appeal any adverse administrative exercise its rights under Section 7A(g) of the Participation Agreement or judicial decision, except that under Section 4 of the Tax Indemnitee shall not be required to pursue any appeals to Indemnity Agreement, as the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutcase may be, in the good faith judgment of such Tax Indemniteemanner requested by Lessee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data provided that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee Lessor be required to pursue any contest initiate or continue (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior request any other Person to the commencement of such initiate or continue) a contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) claim unless: (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iva) no Lease Major Default or Event of Default shall have occurred and be continuing unless Owner has Lessee shall have provided security for reasonably satisfactory to Lessor securing Lessee's performance of its obligations hereunder by advancing under this Article 8A; (b) Lessee shall have agreed to pay on an After-Tax Basis all reasonable costs and expenses that Lessor incurs in connection with contesting such claim and all amounts that Lessor is required to pay from time to time pursuant to Section 7A(g)(iv)(B) of the Participation Agreement or Section 4(d) of the Tax Indemnity Agreement, as the case may be; (c) the action to be taken will not result in a material danger of sale, forfeiture or loss of the Aircraft or any part thereof or any interest therein or the creation of a Lien (other than a Permitted Lien) on the Aircraft, the Trust Estate or the Trust Indenture Estate unless Lessee shall have adequately bonded or otherwise made provision to protect the interests of Lessor and the Owner Participant in a manner reasonably satisfactory to Lessor and the Owner Participant; (d) if such contest shall require payment of the Tax claimed, Lessee shall have advanced on an interest-free basis the amount thereof (including any interest, penalties and additions to tax with respect thereto) for the period during which such contest is continuing and shall have agreed to indemnify such Lessor and (in the case of a contest pursuant to Section 4 of the Tax Indemnity Agreement) the Owner Participant or (in the case of a contest pursuant to Section 7A of the Participation Agreement) each Head Lease Tax Indemnitee before proceeding for any adverse tax consequences of such interest-free loan; (e) Lessee shall have acknowledged its obligation to indemnify Lessor should the contested claim prove to be correct except to the extent that the Final Determination demonstrates that Lessee would not be so obligated absent such acknowledgment; (f) in the case of a Tax Indemnitee Controlled Contest pursuant to Section 7A(g) of the Participation Agreement or continuing with any contest pursuant to Section 4 of the Tax Indemnity Agreement, Lessor and the relevant Head Lease Tax Indemnitee shall have received, at Lessee's expense, a written opinion of independent tax counsel selected by Lessee and reasonably acceptable to Lessor and such Head Lease Tax Indemnitee to the effect that there is a Reasonable Basis for such contest; (g) in the case of a Tax Indemnitee Controlled Contest pursuant to Section 7A of the Participation Agreement, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith indemnity that would be payable by such Tax Indemnitee for expenses, and (v) prior Lessor pursuant to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for Section 7A if such claim hereunder, provided is not contested or if a contest of such claim is unsuccessful (plus the aggregate amount of the indemnities that Owner shall not would be bound payable by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessor pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee 7A if all related claims that have been or could be raised with respect to any other period are not contested) would exceed $ 10,000; and (h) in the case of a contest pursuant to Section 4 of the Tax Indemnity Agreement, the amount of the indemnity that would be payable by Lessor pursuant to the Tax Indemnity Agreement if such claim is not contested or if a contest of such claim is unsuccessful (and plus the aggregate amount of the indemnities that would be payable by Lessor pursuant to the Tax Indemnity Agreement if all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid that have been or advanced to such Tax Indemnitee could be raised with respect to such claim, plus interest at the rate that any other period are not contested) would have been payable by the relevant Taxing Authority with respect to a refund of such Taxexceed $ 50,000. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Midway Airlines Corp)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sue for a refund rxxxnd prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s 's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner that Lessee could be liable to pay or indemnify for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner and that Lessee could have an indemnity obligation for that Tax hereunder, such Tax Indemnitee shall promptly give Owner notice notify Lessee in writing of such claim (provided, that failure so to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such the failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) ), and shall take no action with respect to such claim without the Lessee's prior written consent of Owner for 30 days following the Lessee's receipt of such notice by Ownernotice; provided, that, in the case of a claim made against a Tax Indemnitee, if applicable Law requires such Tax Indemnitee shall be required by law to take action prior to before the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so avoid taking action (it being understood that and a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to before the end of such 30-day period if (i)(A1)(aa) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest contest, or (Bbb) the failure to so pay would result in criminal penalties penalties, and (ii2) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, provided that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the Lessee's expense of Owner (including, without limitation, including all reasonable costs, expenses expenses, and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that the Tax Indemnitee is able to separate the contested issue or issues issue(s) from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, Transactions without (in the good faith judgment of such Tax Indemnitee, 's good faith judgment) adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is and reasonably necessary to conduct such contest. In If the case of a contest is being controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, S) 9.3.4 (including any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the Lessee's prior written consent of the Owner (except as contemplated by Section 8.3.4(b(S) 9.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Lessee to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.unless

Appears in 1 contract

Samples: Note Purchase Agreement (Airtran Holdings Inc)

Contest. (a) If Lessor receives a written claim is made against a for an indemnity pursuant to Section 7A of the Participation Agreement or pursuant to the Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due Indemnity Agreement for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax Lessee would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunderpay Lessor an indemnity pursuant to this Article 8A, Lessor shall promptly notify Lessee thereof in writing. If requested by Owner in writing within 30 days after its receipt Lessee by written notice received by Lessor at least four Business Days before the latest date on which Lessor may request or initiate a contest pursuant to Section 7A(g) of such notice, such Tax Indemnitee shall, at the expense Participation Agreement or Section 4 of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee Indemnity Agreement, Lessor shall appeal any adverse administrative exercise its rights under Section 7A(g) of the Participation Agreement or judicial decision, except that under Section 4 of the Tax Indemnitee shall not be required to pursue any appeals to Indemnity Agreement, as the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutcase may be, in the good faith judgment of such Tax Indemniteemanner requested by Lessee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data provided that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee Lessor be required to pursue any contest initiate or continue (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior request any other Person to the commencement of such initiate or continue) a contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) claim unless: (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iva) no Lease Major Default or Event of Default shall have occurred and be continuing unless Owner has Lessee shall have provided security for reasonably satisfactory to Lessor securing Lessee's performance of its obligations hereunder by advancing under this Article 8A; (b) Lessee shall have agreed to pay on an After-Tax Basis all reasonable costs and expenses that Lessor incurs in connection with contesting such claim and all amounts that Lessor is required to pay from time to time pursuant to Section 7A(g) (iv) (B) of the Participation Agreement or Section 4(d) of the Tax Indemnity Agreement, as the case may be; (c) the action to be taken will not result in a material danger of sale, forfeiture or loss of the Aircraft or any part thereof or any interest therein or the creation of a Lien (other than a Permitted Lien) on the Aircraft, the Trust Estate or the Trust Indenture Estate unless Lessee shall have adequately bonded or otherwise made provision to protect the interests of Lessor and the Owner Participant in a manner reasonably satisfactory to Lessor and the Owner Participant; (d) if such contest shall require payment of the Tax claimed, Lessee shall have advanced on an interest-free basis the amount thereof (including any interest, penalties and additions to tax with respect thereto) for the period during which such contest is continuing and shall have agreed to indemnify such Lessor and (in the case of a contest pursuant to Section 4 of the Tax Indemnity Agreement) the Owner Participant or (in the case of a contest pursuant to Section 7A of the Participation Agreement) each Head Lease Tax Indemnitee before proceeding for any adverse tax consequences of such interest-free loan; (e) Lessee shall have acknowledged its obligation to indemnify Lessor should the contested claim prove to be correct except to the extent that the Final Determination demonstrates that Lessee would not be so obligated absent such acknowledgment; (f) in the case of a Tax Indemnitee Controlled Contest pursuant to Section 7A(g) of the Participation Agreement or continuing with any contest pursuant to Section 4 of the Tax Indemnity Agreement, Lessor and the relevant Head Lease Tax Indemnitee shall have received, at Lessee's expense, a written opinion of independent tax counsel selected by Lessee and reasonably acceptable to Lessor and such Head Lease Tax Indemnitee to the effect that there is a Reasonable Basis for such contest; (g) in the case of a Tax Indemnitee Controlled Contest pursuant to Section 7A of the Participation Agreement, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith indemnity that would be payable by such Tax Indemnitee for expenses, and (v) prior Lessor pursuant to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for Section 7A if such claim hereunder, provided is not contested or if a contest of such claim is unsuccessful (plus the aggregate amount of the indemnities that Owner shall not would be bound payable by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessor pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee 7A if all related claims that have been or could be raised with respect to any other period are not contested) would exceed $ 10,000; and (h) in the case of a contest pursuant to Section 4 of the Tax Indemnity Agreement, the amount of the indemnity that would be payable by Lessor pursuant to the Tax Indemnity Agreement if such claim is not contested or if a contest of such claim is unsuccessful (and plus the aggregate amount of the indemnities that would be payable by Lessor pursuant to the Tax Indemnity Agreement if all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid that have been or advanced to such Tax Indemnitee could be raised with respect to such claim, plus interest at the rate that any other period are not contested) would have been payable by the relevant Taxing Authority with respect to a refund of such Taxexceed $ 50,000. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Midway Airlines Corp)

Contest. (a) If a written claim is shall be made against a Tax any ------- Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a any Tax Indemnitee makes a determination that a Tax is due in excess of $10,000 for which Owner could have an indemnity obligation hereunderLessees would be obligated to indemnify pursuant to this Article VII, such Tax Indemnitee shall promptly give Owner notice notify ----------- Lessees after such Indemnitee becomes aware of such action and in writing any event within 30 days after receipt by such Indemnitee of a written claim (but failure to notify Lessees within such 30-day period shall not impair such Indemnitee's right to indemnification under this Article VII except to the extent that ----------- Lessees' rights to contest such claim shall have been materially impaired by such failure) and shall, to the extent permitted by applicable law, not pay the claim before the earlier of (i) 30 days after giving Lessees notice, and (ii) receipt of Lessees' response. If either Lessee shall so request within 30 days after receipt of such notice, such Indemnitee shall, at Lessees' expense reimbursed to such Indemnitee on an After-Tax Basis, contest the imposition, validity or applicability of such Tax. The ultimate control over the conduct of such contest (including the right to forego any and all administrative appeals, proceedings, hearings and conferences in respect of such claim and the right to select the forum for such contest and determine whether any such contest shall be by (i) resisting payment of such Tax, (ii) paying such Tax under protest or (iii) paying such Tax and seeking a refund thereof) shall remain with such Indemnitee; provided, however, that failure such Indemnitee shall keep Lessees or their -------- ------- counsel reasonably informed as to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require the progress thereof, consult with Lessees within a contest of such claim) and shall take no reasonable period before any significant action with respect thereto is taken or omitted and consider in good faith any suggestions made by Lessees or their counsel; provided, further, -------- ------- that, for so long as there shall not have been a Bankruptcy Default nor shall Owner Participant have exercised any of its remedies pursuant to Section 16 of the Lease, no such claim proceedings or litigation shall be settled or otherwise compromised without the prior written consent of Owner for 30 days following Lessees. If such Indemnitee so elects, such contest shall be conducted by Lessees in the receipt name of such notice by Owner; provided, that, Indemnitee (subject to the preceding proviso) and in the case of a claim made against a Tax Indemnitee, if no event shall such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall or Lessees be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right permitted to contest or to continue to contest, as the case may be, the imposition of any Tax for which Lessees are obligated to indemnify pursuant to this Article VII unless (BA) the failure Lessees shall ----------- have agreed to pay such Indemnitee on demand and shall have paid as so pay would result in criminal penalties demanded all reasonable costs and (ii) expenses that such Tax Indemnitee shall take any action so required may incur in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, contesting such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner claim (including, without limitation, all reasonable costs, expenses expenses, losses, reasonable legal and reasonable attorneys’ and accountants’ accounting fees and disbursements), ) on an After-Tax Basis; (B) such Indemnitee shall have determined in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk danger of forfeituresale, sale forfeiture or loss of the Aircraft any Transponder or any part thereof or any interest therein (unless Owner except if Lessees shall have made provisions provision to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Indemnitee); and (C) if such contest shall be conducted in a manner requiring the payment of the claim, Lessees shall have advanced on an interest-free basis an amount equal to the amount of such claim which such Indemnitee shall have elected to pay and Lessees shall have indemnified the Indemnitee in a manner satisfactory to the Indemnitee, for any adverse tax consequences from the receipt, or interest-free nature, of such advance. If, following a Lessee's exercise of its contest rights pursuant to Section 7.04 hereof, there is a final determination adverse to Indemnitee and ------------ Lessees and an Indemnitee dispute such Lessee's indemnity obligations hereunder with respect to such final determination, all fees and expenses incurred during such lawsuit by the prevailing party will be paid or reimbursed, on an After-Tax IndemniteeBasis, by the losing party. (b) (An Indemnitee may at any time elect to decline to take any action or any further action with respect to a proposed claim or contest; provided, -------- however, that if either Lessee has properly requested such Tax action pursuant to ------- this Article VII, such Indemnitee agrees shall notify Lessees that it waives its right ----------- to notify Owner any indemnity payment by Lessees that would otherwise be payable by Lessees pursuant to this Article VII in writing promptly after it becomes aware respect of such claim. An election ----------- by an Indemnitee to decline to take any action or take any further action with respect to a proposed claim or contest for any given taxable period shall not affect the rights and obligations of any other Indemnitee with respect to such riskproposed claim. An election by an Indemnitee to decline to take any action with respect to a proposed claim or contest shall not affect the rights and obligations of such Indemnitee and Lessees hereunder in respect of any other taxable period or any other taxing authority unless such election not to contest materially impairs as a legal or practical matter the ability of Lessees or an Indemnitee to contest any Tax for which such Indemnitee is indemnified pursuant to this Article VII. Upon any such election by an Indemnitee if Lessees shall ----------- have advanced an amount to an Indemnitee pursuant to clause (C) of this Section ------- 7.04(a), such Indemnitee shall repay the advance to Lessees, plus any net tax ------- benefit realized by such Indemnitee as a result of the repayment of such advance; such repayment shall be made upon the occurrence of the earlier of (ivx) no Lease final adjudication of such contest (including a settlement thereof) and (y) such time as such Indemnitee shall elect to discontinue the contest as above provided; provided, however, notwithstanding the foregoing, such Indemnitee -------- ------- shall not be obligated to make any repayment to Lessees pursuant to this sentence for so long as an Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to but shall promptly make such Tax Indemnitee before proceeding or continuing with such contest, the amount payment once all Events of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner Default shall have acknowledged its liability for such claim hereunder, provided that Owner shall not no longer be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxcontinuing. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Magellan International Inc)

Contest. The following shall apply to all claims for indemnity under Section 10.1 (General): (a) If a any Indemnitee has received written notice of any claim is made in respect of any Losses hereby indemnified against a Tax Indemnitee for Taxes with respect (herein, an “Indemnified Claim”), it shall give prompt written notice thereof to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (Lessee; provided, however, that the failure of an Indemnitee to so notify Owner give such notice shall not relieve Owner Lessee of its indemnity obligations hereunder unless hereunder, except to the extent that such failure adversely affects any applicable defense or counterclaim or otherwise increases the amount Lessee would have been liable for in the absence of such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of provide such notice by Owner; provided, that, in or adversely affects the case ability of a claim made against a Tax Indemnitee, if Lessee to defend such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c))Indemnified Claim. (b) Notwithstanding the foregoing, Each Indemnified Claim as to which Lessee has acknowledged in no event shall a Tax Indemnitee writing it would be required to pursue indemnify the Indemnitee(s) under Section 10.1(a) (except to the extent that the final determination of such contest demonstrates that such Indemnified Claim is covered by an exception in Section 10.1(c) hereof), if reasonably requested by Lessee, be contested by the Indemnitee in good faith by appropriate proceedings, provided that Lessee shall indemnify such Indemnitee in respect of the reasonable out-of-pocket fees, costs or expenses actually incurred by such Indemnitee in conducting such contest and the amount of any interest or penalties which are required to be paid as a result of contesting such Indemnified Claim, and provided further that such contest (proceedings would not result in any material risk of the sale, forfeiture or other loss of the Engine or any interest therein or any risk of criminal liability on the part of such Indemnitee. Lessee shall be entitled to permit Owner assume responsibility for and control of the defense of any Indemnified Claim in respect of which any Indemnitee makes or intends to pursue any contest) unless make a claim against Lessee for indemnity pursuant to this Section 10, and as to which Lessee has acknowledged in writing its responsibility for hereunder, provided that (i) Owner shall have agreed the legal counsel retained by Lessee for such purpose is reasonably acceptable to pay such Tax Indemnitee on demand all Lessor, (ii) the judicial or administrative proceeding either (A) involves solely the Indemnified Claim or (B) involves the Indemnified Claim and other claims, but the Indemnified Claim may be and is severed from the other claims (at Lessee’s cost and expense, including reimbursement of the reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting obtaining such Taxesseverance), includingand (iii) Lessee pursues such contest diligently and in good faith and, without limitationupon the reasonable request of Lessor, all provides Lessor with reasonable out details of pocket costs the status of the contest and expenses copies of legal briefs, court filings; provided further that, Lessee shall not be entitled to assume and reasonable attorneys’ and accountants’ fees and disbursementscontrol the defense of or to compromise any Indemnified Claim (1) during the continuance of any Significant Default or Event of Default, (ii2) if an actual or potential conflict of interest exists between Lessee and such Indemnitee making it advisable in the good faith opinion of the applicable Indemnitee for such Indemnitee to be represented by separate counsel, or (3) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not proceeding would result in any material risk of forfeiturethe sale, sale forfeiture or other loss of the Aircraft Engine or any interest therein or any risk of criminal liability on the part of such Indemnitee. Subject to the immediately preceding sentence, where Lessee undertakes the defense of an Indemnitee with respect to an Indemnified Claim in compliance with the terms hereof, no additional legal fees or expenses of such Indemnitee incurred in connection with the defense of such Indemnified Claim shall be indemnified hereunder unless the fees or expenses were incurred at the written request of Lessee. An Indemnitee may, without interfering in any material respect with the conduct of such contest by Lessee, participate at its own expense in any judicial proceeding controlled by Lessee pursuant to the foregoing provisions, and such participation shall not constitute a waiver of the indemnification provided in this Section 10. (c) Each Indemnitee shall supply Lessee with such information as Lessee shall reasonably request to defend or participate in any proceeding permitted by this Section 10, provided that such information requested by Lessee is (i) not within Lessee’s control, and (ii) within such Indemnitee’s control or is reasonably available to such Indemnitee and, unless Owner such information is necessary in order to assert a meritorious and material defense, is not confidential or proprietary information and the disclosure of which is not otherwise prejudicial to such Indemnitee. (d) Subject to the terms of Section 10.2(a) and (b) above, no Indemnitee shall enter into a settlement or other compromise or consent to a judgment with respect to any Indemnified Claim (other than any in respect of an Indemnified Claim involving any risk of criminal liability) without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its rights with respect to such Losses under this Section 10 or unless a Significant Default or an Event of Default has occurred and is continuing; provided that the payment of an amount to which any Losses relate when legally compelled to do so by a Government Entity of competent jurisdiction after which a request for a refund of such amount is diligently pursued by appropriate procedures in accordance with the terms of this Section 10 will not be considered a settlement, compromise or consent to judgment requiring Lessee’s prior consent or resulting in a waiver of such Indemnitee’s rights of indemnification with respect to such amount. Except as otherwise provided in the immediately preceding sentence, the entering into any such settlement or compromise or consent without Lessee’s prior written consent shall constitute a waiver by such Indemnitee of all its rights of indemnification hereunder in respect of such matter. Lessee shall not enter into any settlement or compromise with respect to any Indemnified Claim which would admit any liability, negligence, misconduct or other wrongdoing by the affected Indemnitee without such Indemnitee’s consent, unless such settlement or other compromise obligates Lessee to pay (and Lessee shall have made provisions to protect paid) the interests full amount of all potential liability from any source whatsoever of such Tax Indemnitee in a manner connection with such Indemnified Claim and Lessee provides in form and substance reasonably satisfactory to such Tax IndemniteeIndemnitee the full and irrevocable release of such Indemnitee from all potential liabilities related to such Indemnified Claim. (e) In the event Lessee shall be obligated to indemnify any Indemnitee pursuant to this Section 10, Lessee shall (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) provided no Lease Significant Default or Event of Default shall have occurred and then be continuing unless Owner has provided security for its obligations hereunder continuing) be subrogated (without warranty by advancing the Indemnitee) to the rights of such Indemnitee in respect of the matter as to which the indemnity was in fact fully paid, upon such payment, and may pursue the same at Lessee’s expense. If any Indemnitee shall obtain a recovery of all or any part of any amount which Lessee shall have paid to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner which Lessee shall have acknowledged its liability for reimbursed such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission 10, such Indemnitee shall promptly (at such time as no Significant Default or Event of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c)Default which may have occurred is then continuing, and subject to Section 8.3.4(c), 5.20 (Set-Off) hereof) pay or cause to be paid to Lessee an amount equal to such Tax Indemnitee shall repay to Owner recovery (but not any amount previously in excess of the amount Lessee has paid or advanced to such Tax Indemnitee with in respect to such claim, of the indemnified Losses plus interest thereon from date of payment by Lessee at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such TaxLibor plus 50 basis points). (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Engine Lease (Airtran Airways Inc)

Contest. (a) If Sublessor receives a written claim is made against a for an indemnity pursuant to the Tax Indemnitee Indemnity Agreement for Taxes with respect which Sublessee would be required to which Owner could be liable for payment or pay Sublessor an indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee Sublessor shall promptly give Owner notice notify Sublessee thereof in writing of such claim (provided, but it being understood and agreed that failure of Sublessor to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in provide such notice to Owner, so inform Owner, and such Tax Indemnitee Sublessee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially adversely affect or otherwise prejudice the any Sublessor’s right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contestan indemnity hereunder). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner Sublessee in writing within 30 days after ten (10) Business Days before the latest day on which Sublessor may request a contest pursuant to Section 6 of the Tax Indemnity Agreement, Sublessor shall exercise its receipt rights, if any, under Section 6 of the Tax Indemnity Agreement provided that in no event shall Sublessor be required to initiate or continue (or be required to request any other person to initiate or continue) a contest unless: (i) the amount of the obligation on the part of Sublessee to indemnify Sublessor pursuant to subsection (1) hereof shall be at least $50,000, (ii) Sublessee agrees to reimburse Sublessor on demand (and complies with such notice, such Tax Indemnitee shall, at agreement) for all of the expense of Owner Participant’s and Sublessor’s reasonable costs and expenses (including, without limitation, all reasonable costs, expenses legal and reasonable attorneys’ and accountants’ accounting fees and disbursements)) which each may incur in contesting such disallowance, in good faith (iii) if Owner Participant elects to contest the disallowance by paying the tax claimed (orincluding interest, if permitted by applicable lawpenalties or additions to tax) and seeking a refund, allow Owner Sublessee shall advance to contest) through appropriate administrative and judicial proceedings Sublessor on an interest free basis the validity, applicability or aggregate amount of taxes, interest, penalties and additions to the tax applicable to such Taxes by (I) resisting payment thereofdisallowance and agree to indemnify Sublessor and the Owner Participant for any adverse tax consequences resulting from such advance, (IIiv) such contest would not paying entail any risk of criminal penalties, (v) with respect to such disallowance, Sublessee shall have furnished Sublessor at Sublessee’s expense, with a written opinion of independent tax counsel selected by Sublessor that a Reasonable Basis exists to contest such disallowance and prior to filing any appeal an opinion that a successful outcome on appeal is more likely than not and have posted a bond or other security for such appeal, (vi) no Default or Event of Default, under any of the same except under protest if protest Operative Documents by Sublessor or the Airline Services Agreement, has occurred and is necessary continuing, and proper or (IIIvii) if Sublessee shall have delivered to Sublessor a written acknowledge of Sublessee’s obligation to indemnify in full Sublessor pursuant to this Agreement to the payment extent that the contest is made, using reasonable efforts not successful. Sublessor shall have no obligation to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested cause Owner Participant and Owner Participant shall have no obligation to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals decision of an appellate court to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Pinnacle Airlines Corp)

Contest. (a) If Lessor receives a written claim is made against a for an indemnity pursuant to Section 7A of the Participation Agreement or pursuant to the Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due Indemnity Agreement for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax Lessee would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunderpay Lessor an indemnity pursuant to this Article 8A, Lessor shall promptly notify Lessee thereof in writing. If requested by Owner in writing within 30 days after its receipt Lessee by written notice received by Lessor at least four Business Days before the latest date on which Lessor may request or initiate a contest pursuant to Section 7A(g) of such notice, such Tax Indemnitee shall, at the expense Participation Agreement or Section 4 of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee Indemnity Agreement, Lessor shall appeal any adverse administrative exercise its rights under Section 7A(g) of the Participation Agreement or judicial decision, except that under Section 4 of the Tax Indemnitee shall not be required to pursue any appeals to Indemnity Agreement, as the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutcase may be, in the good faith judgment of such Tax Indemniteemanner requested by Lessee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data provided that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee Lessor be required to pursue any contest initiate or continue (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior request any other Person to the commencement of such initiate or continue) a contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) claim unless: (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iva) no Lease Major Default or Event of Default shall have occurred and be continuing unless Owner has Lessee shall have provided security for reasonably satisfactory to Lessor securing Lessee's performance of its obligations hereunder by advancing under this Article 8A; (b) Lessee shall have agreed to pay on an After-Tax Basis all reasonable costs and expenses that Lessor incurs in connection with contesting such claim and all amounts that Lessor is required to pay from time to time pursuant to Section 7A(g)(iv)(B) of the Participation Agreement or Section 4(d) of the Tax Indemnity Agreement, as the case may be; (c) the action to be taken will not result in a material danger of sale, forfeiture or loss of the Aircraft or any part thereof or any interest therein or the creation of a Lien (other than a Permitted Lien) on the Aircraft, the Trust Estate or the Trust Indenture Estate unless Lessee shall have adequately bonded or otherwise made provision to protect the interests of Lessor and the Owner Participant in a manner reasonably satisfactory to Lessor and the Owner Participant; (d) if such contest shall require payment of the Tax claimed, Lessee shall have advanced on an interest-free basis the amount thereof (including any interest, penalties and additions to tax with respect thereto) for the period during which such contest is continuing and shall have agreed to indemnify such Lessor and (in the case of a contest pursuant to Section 4 of the Tax Indemnity Agreement) the Owner Participant or (in the case of a contest pursuant to Section 7A of the Participation Agreement) each Head Lease Tax Indemnitee before proceeding for any adverse tax consequences of such interest-free loan; (e) Lessee shall have acknowledged its obligation to indemnify Lessor should the contested claim prove to be correct except to the extent that the Final Determination demonstrates that Lessee would not be so obligated absent such acknowledgment; (f) in the case of a Tax Indemnitee Controlled Contest pursuant to Section 7A(g) of the Participation Agreement or continuing with any contest pursuant to Section 4 of the Tax Indemnity Agreement, Lessor and the relevant Head Lease Tax Indemnitee shall have received, at Lessee's expense, a written opinion of independent tax counsel selected by Lessee and reasonably acceptable to Lessor and such Head Lease Tax Indemnitee to the effect that there is a Reasonable Basis for such contest; (g) in the case of a Tax Indemnitee Controlled Contest pursuant to Section 7A of the Participation Agreement, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith indemnity that would be payable by such Tax Indemnitee for expenses, and (v) prior Lessor pursuant to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for Section 7A if such claim hereunder, provided is not contested or if a contest of such claim is unsuccessful (plus the aggregate amount of the indemnities that Owner shall not would be bound payable by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessor pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee 7A if all related claims that have been or could be raised with respect to any other period are not contested) would exceed $10,000; and (h) in the case of a contest pursuant to Section 4 of the Tax Indemnity Agreement, the amount of the indemnity that would be payable by Lessor pursuant to the Tax Indemnity Agreement if such claim is not contested or if a contest of such claim is unsuccessful (and plus the aggregate amount of the indemnities that would be payable by Lessor pursuant to the Tax Indemnity Agreement if all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid that have been or advanced to such Tax Indemnitee could be raised with respect to such claim, plus interest at the rate that any other period are not contested) would have been payable by the relevant Taxing Authority with respect to a refund of such Taxexceed $50,000. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Midway Airlines Corp)

Contest. (a) If any Tax Indemnitee receives a written claim is made against for any Tax for which a Tax Indemnitee for Taxes with respect would be required to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have pay an indemnity obligation hereunderpursuant to Section 5.7, such Tax Indemnitee shall notify Lessee promptly give Owner notice in writing of such claim (providedclaim, provided that any failure to so notify Owner shall provide such notice will not relieve Owner Lessee of its indemnity obligations hereunder any indemnification obligation pursuant to Section 5.7 unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without precludes the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right ability to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunderTax. If timely requested by Owner Lessee in writing within 30 days after its receipt of such noticewriting, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ expenses, legal and accountants' fees and disbursements), and penalties, interest and additions to tax incurred in contesting such claim) in good faith contest or (or, if permitted by applicable law, allow Owner Law) permit Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of contest such Taxes claim by (Ii) resisting payment thereofthereof if practicable and appropriate, (IIii) not paying the same except under protest if protest is necessary and proper proper, or (IIIiii) if the payment is made, using reasonable efforts to obtain a refund thereof of such Taxes in an appropriate administrative and/or and judicial proceedingproceedings. If requested to do so The Tax Indemnitee shall determine the method of any contest conducted by Owner, the Tax Indemnitee except for any contest involving only taxes (other than income taxes) of the Tax Indemnitee for which the Tax Indemnitee is indemnified under this Agreement ("Severable Taxes") and (in good faith consultation with Lessee) control the conduct thereof. Lessee shall appeal determine the method of any adverse administrative contest conducted by Lessee and any contest involving Severable Taxes and (in good faith consultation with the Tax Indemnitee) control the conduct thereof. Lessee shall pay in full all payments of Rent and other amounts payable pursuant to the Lease, without reduction for or judicial decisionon account of any Tax (other than Lessor Taxes described in Section 5.8), except that the while such contest is continuing. A Tax Indemnitee shall not be required to pursue any appeals contest, or to the United States Supreme Court. If and continue to the extent contest, a claim for Taxes under this Section 5.9 if (w) Lessee shall have failed, upon request of the Tax Indemnitee is able Indemnitee, to separate acknowledge its liability for such claims, or (x) such contest would result in a risk of criminal penalties or a material risk of a sale, forfeiture or loss of (including loss of use), or the contested issue imposition of a Lien (other than a Permitted Lien) on, the Engine (unless the Lessee posts a bond or issues from other issues arising security reasonably acceptable in the same administrative or judicial proceeding that are unrelated form and substance to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee), adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner or (at Owner’s cost and expensey) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled other than a contest of Severable Taxes, Lessee shall not have furnished an opinion of independent tax counsel selected by Tax Indemnitee and reasonably satisfactory to Lessee, that a reasonable basis exists for such contest, or (z) in the case of a contest other than a contest of Severable Taxes, a Default shall be continuing (unless Lessee shall have provided security reasonably satisfactory to Lessor securing Lessee's performance of its obligations under this Section 5.9). If a Tax Indemnitee contests any claim for Taxes by making a payment and seeking a refund thereof, then Lessee shall advance to the Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding on an interest-free basis, an amount equal to the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail Taxes to take any action expressly required be paid by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs the contest and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (indemnify Lessor on an After-Tax Basis for any adverse tax consequences to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement Tax Indemnitee of such contest on an interest-free after-Tax basis advance. Upon the final determination of any contest pursuant to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner this Section 5.9 in respect of any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner Taxes for which Lessee shall have made provisions an advance to protect Lessor in accordance with the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contestimmediately preceding sentence, the amount of the Tax being contested, plus Lessee's obligation shall be determined as if such advance had not been made; any interest and penalties and an amount estimated in good faith by such indemnity obligation of Lessee to Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect 5.9 and Tax Indemnitee's obligation to such Tax (repay the advance will be satisfied first by setoff against each other, and any directly related claim and any claim the outcome of which is determined based upon the outcome of difference owing by either party shall be paid within ten days after such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxfinal determination.

Appears in 1 contract

Samples: Engine Lease (Republic Airways Holdings Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so PARTICIPATION AGREEMENT (2012-1) 30 required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee PARTICIPATION AGREEMENT (2012-1) 31 before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

Contest. (ai) If a written claim is made against a Tax Indemnitee for Taxes with respect to which LATAM or Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which LATAM or Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give the Owner and LATAM notice in writing of such claim (provided, that failure to so notify the Owner or LATAM shall not relieve LATAM or Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses the Owner’s or LATAM’s rights to require a contest of such claimin which case the Owner and LATAM are relieved of their indemnity obligations to the extent their right to contest is foreclosed) and shall take no action with respect to such claim without the prior written consent of Owner LATAM for 30 days following the receipt of such notice by Ownerthe Owner and LATAM; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Ownerthe Owner and LATAM, so inform Ownerthe Owner and LATAM, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by LATAM or Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties penalties, and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that the Owner and LATAM shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish the Owner and LATAM with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which LATAM or Owner may be required to indemnify hereunder. If requested by the Owner and LATAM in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner LATAM (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable lawApplicable Law, allow LATAM or Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Ownerthe Owner and LATAM, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme CourtCourt or the highest relevant court of Chile. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit LATAM or Owner to control the conduct of any such proceeding and shall provide to LATAM or Owner (at LATAM or Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with LATAM and Owner in good faith regarding the manner of contesting such claim and shall keep LATAM and Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 4.04(d) (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner LATAM (except as contemplated by Section 8.3.4(b4.04(d)(ii) or (c4.04(d)(iii)). (bii) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit LATAM or Owner to pursue any contest) unless (i) LATAM or Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, LATAM or Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free free, after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the LATAM or Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless LATAM or Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify the Owner and LATAM in writing promptly after it becomes aware of any such risk), (iv) no Lease Indenture Event of Default shall have occurred and be continuing unless LATAM or Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by LATAM or Owner, LATAM or Owner shall have acknowledged its liability for such claim hereunder, provided that LATAM or Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that LATAM or Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by LATAM or Owner pursuant to this Section 8.3 4.04 without the prior written permission of OwnerLATAM, LATAM or Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c4.04(d)(iii), and subject to Section 8.3.4(c4.04(d)(iii), such Tax Indemnitee shall promptly repay to LATAM or Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (ciii) Notwithstanding anything contained in this Section 8.34.04, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without OwnerLATAM’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 4.04 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to LATAM or Owner any amount previously paid or advanced by LATAM or Owner pursuant to this Section 8.3 4.04 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner LATAM the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Latam Airlines Group S.A.)

Contest. If any claim or proposed claim or proposed assessment shall be made in writing against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (a) If including a written claim is made against a notice of such proceeding) for any Tax Indemnitee for Taxes with respect as to which Owner could be liable for payment or the Lessee may have an indemnity hereunderobligation, or if a any Tax Indemnitee makes a determination shall determine that a any Tax is due for as to which Owner could the Lessee may have an indemnity obligation hereundermay be payable, such Tax Indemnitee shall promptly give Owner notice (and in any event, within the earlier of fifteen (15) Business Days of the Tax Indemnitee's receipt of any claim or proposed claim or two (2) days before payment is due) notify the Lessee in writing of such claim (provided, that failure to so notify Owner and shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no any action with respect to such claim claim, proceeding or Tax without the prior written consent of Owner the Lessee for 30 thirty (30) days following the after receipt of such notice by Ownerthe Lessee unless the failure to take action could result in the imposition of penalties or fines or material danger of sale, forfeiture or loss; provided, thathowever, in that any failure to provide such notice shall not relieve the case Lessee of any obligation to indemnify any Tax Indemnitee hereunder unless the Lessee is materially adversely affected as a claim made against a Tax Indemniteeresult of such failure; provided, further, however, that if such Tax Indemnitee shall be required by law or regulation to take action with respect to any such claim, proceeding or Tax prior to the end of such thirty (30-) day period, period such Tax Indemnitee shall, in such notice to Ownerthe Lessee, so inform Owner, the Lessee and such Tax Indemnitee shall not take no any action for as long as it is legally able with respect to do so (it being understood that a such claim, proceeding or Tax without the consent of the Lessee before the date on which such Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereundertake action. If requested by Owner in writing If, within 30 thirty (30) days after its receipt of such noticenotice (or such shorter period referred to in the preceding sentence), the Lessee shall request in writing that such Tax Indemnitee contest the imposition of such Tax, the Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements)the Lessee, in good faith contest (orincluding by pursuit of appeals, excluding any requirement to appeal to the U.S. Supreme Court), and shall not settle without the Lessee's consent, or if permitted by applicable lawsuch contest can be pursued independently from any other proceeding involving a Tax liability of such Tax Indemnitee (a "LESSEE-CONTROLLED CONTEST"), the Tax Indemnitee shall allow Owner the Lessee to contest) through appropriate administrative and judicial proceedings contest the validity, applicability or amount of such Tax (other than withholding or net income Taxes by indemnifiable hereunder) by, in the sole discretion of the Person conducting such contest, taking into account the recommendations of the other party: (I1) resisting payment thereof, ; (II2) not paying the same except under protest protest, if protest is shall be necessary and proper or proper; or (III3) if the payment is shall be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If proceedings; or (4) taking such other action as is reasonably requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutLessee from time to time; provided, in the good faith judgment of such Tax Indemniteehowever, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a such Tax Indemnitee be required to pursue any contest (or permit the Lessee to permit Owner to pursue any contest) unless the imposition of any Tax for which the Lessee may be obligated unless: (it) Owner if a Payment Default or a Lease Event of Default shall have occurred and be continuing, Lessee shall either (I) provide security for such tax indemnity obligations that is reasonably acceptable to such Tax Indemnitee or (II) pay such Tax, (u) in the case of net income Taxes indemnifiable hereunder, the amount of the claim and all future related claims exceeds $25,000, (v) [INTENTIONALLY OMITTED] (w) in the case of a Lessee-Controlled Contest, the Lessee shall have acknowledged in writing its liability hereunder if the contest is unsuccessful, provided that such acknowledgement shall be of no force and effect if the final determination of such Lessee-Controlled Contest, or the facts and circumstances underlying such final determination demonstrates 73 Participation Agreement 79 that the basis for an adverse determination was one for which indemnification is not required under Section 13(b) and 13(c), (x) the Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by that such Tax Indemnitee shall incur in connection with contesting such Taxes, including, without limitation, claim (including all reasonable out of pocket costs legal and expenses and reasonable attorneys’ and accountants’ accounting fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties disbursements and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such paymentinternally allocated time charges), (iiiy) such Tax Indemnitee the Certificate Holders shall have reasonably determined that the action to be taken will not result in any material risk danger of forfeituresale, sale forfeiture or loss of the Aircraft Sites or any portion thereof or interest therein, and (unless Owner z) if such contest shall have made provisions involve payment of the claim, the Lessee shall advance the amount thereof, plus interest, penalties and additions to protect the interests of any Tax with respect thereto, to such Tax Indemnitee in a manner reasonably satisfactory on an interest-free basis and on an After-Tax Basis to such Tax Indemnitee) (provided, that such . The Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated consult in good faith with the Lessee regarding the conduct of any contest controlled by such Tax Indemnitee for expenses, and shall allow the Lessee to attend all hearings and conferences with tax authorities (vor portions of hearings or conferences) prior at which unrelated issues are not discussed and to commencing any judicial action comment upon all related submissions in such Tax Indemnitee-controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law contests and fact that demonstrate that Owner has no liability for the contested amounts hereundervice versa. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3above, a Tax Indemnitee may settle and will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent Taxes if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Taxes and all future related Taxes (including any Taxes for which the contest would serve as precedent), and shall have paid to the Lessee any and all funds paid by the Lessee to such Tax Indemnitee with regard to such contested amount (other than those described in clause (x) of this Section 13(f)) plus any interest which the Lessee paid on such funds. Any contest by the Lessee or at the Lessee's request shall be subject to the following requirements: (i) such contest shall be conducted in good faith by appropriate proceedings which have the effect of staying the enforcement of the lien for such Taxes and any directly related claim and any claim the outcome sale, forfeiture or other loss of which is determined based upon the outcome applicable Site during the pendency of such claim)contest, (ii) none of the Lessor, the Trustee, the Agent and the Participants shall pay be subject to Owner any amount previously paid risk of criminal liability or advanced material civil liability (for which they are not indemnified in a manner reasonably satisfactory to the appropriate party) by Owner pursuant to this Section 8.3 with respect to virtue of the matters being contested or such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxproceedings, and (iii) shall agree to discuss the Lessee, in accordance with Owner prudent practice, has set aside adequate reserves for the views or positions of any relevant Taxing Authority with respect payment thereof and has provided evidence reasonably acceptable to the imposition Agent, the Lessor and the Participants of such Taxreserves.

Appears in 1 contract

Samples: Participation Agreement (Perot Systems Corp)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could Lessee may be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such the Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (after its receipt and shall furnish Lessee with copies of the claim and all other writings received from the taxing authority relating to the claim; provided, however, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations any obligation to indemnify the Tax Indemnitee hereunder unless such failure shall effectively preclude Lessee’s ability to notify effectively forecloses Owner’s rights to require a initiate or continue the contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such . The Tax Indemnitee shall be not pay such claim prior to 30 days after providing Lessee with such written notice, unless required to do so by law to take action prior or unless deferral of payment would cause adverse consequences to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Indemnitee. The Tax Indemnitee shall take no action for as long as it is legally able to do so in good faith, with due diligence and at Lessee’s expense, if requested in writing by Lessee, contest (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In additionincluding pursuing all appeals, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary United States Supreme Court) in order to contest the claim) furnish Owner with copies name of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such the Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted requested by applicable Lessee and permissible as a matter of law, allow Owner in the name of Lessee), or shall at Lessee’s option permit Lessee to contest) through appropriate administrative and judicial proceedings contest in either the name of Lessee or with the Tax Indemnitee’s consent, which consent shall not be unreasonably withheld, in the name of the Tax Indemnitee, the validity, applicability or amount of such Taxes by by, (Ii) resisting payment thereof, thereof if practical; (IIii) not paying the same except under protest if protest is necessary and proper or proper; (IIIiii) if the payment is be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If proceedings; or (iv) taking such other reasonable action as is reasonably requested by Lessee from time to do so by Ownertime; Notwithstanding the foregoing provisions of this paragraph (h), the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals contest, or permit Lessee to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutcontest, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (iA) Owner Lessee shall have agreed in writing to pay such on an after-tax basis to the Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses incurred by such which the Tax Indemnitee may incur in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof and (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivB) no Specified Default or Lease Event of Default shall have occurred and be continuing continuing, (C) such contest will not result in any material danger of the sale, forfeiture or loss of any of the Units unless Owner has Lessee shall have provided security reasonably acceptable to the Tax Indemnitee, and there is no risk of imposition of any criminal penalties as a result of such Tax Claim, (D) if such contest involves payment of such Tax, Lessee will either lend to the Tax Indemnitee on an interest-free basis (without reduction for its obligations hereunder any Tax savings that the Tax Indemnitee may realize as a result of the payment of such Tax), which loan will be repaid in full by advancing to the Tax Indemnitee upon the conclusion of the contest or pay such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith payable by Lessee pursuant to Section 7.1(a) above with respect to such Tax Indemnitee for expensesTax, and (vE) prior to commencing any judicial action controlled by Ownerupon request of a Tax Indemnitee, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify Lessee furnishes such Tax Indemnitee with respect an opinion of Lessee’s counsel that there is a reasonable basis for the position to be asserted in such contest and in the case of an appeal, that there is a substantial likelihood that the adverse decision will be reversed or substantially modified on appeal. If a Tax Indemnitee is obligated to contest a claim under this paragraph (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(ch), such Tax Indemnitee shall repay not compromise or settle such claim without the express written permission of Lessee. If it does so in the absence of such permission, Lessee’s obligation to Owner any amount previously paid or advanced to such Tax Indemnitee indemnify with respect to such claimclaim shall terminate. If a Tax Indemnitee is obligated to contest a claim under this paragraph (h), plus interest such Tax Indemnitee may at the rate that would have been payable by the relevant Taxing Authority any time decline to take further action with respect to a refund the contest of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall first waive in writing its right to any indemnity under this Section 8.3 with payment by Lessee in respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), claim (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at other than the rate that would have been payable by the relevant Taxing Authority with respect to a refund expenses of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxcontest).

Appears in 1 contract

Samples: Participation Agreement (Kansas City Southern)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sue for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Note Purchase Agreement (United Airlines, Inc.)

Contest. (a) If a written claim is made against a Tax any Indemnitee for any Taxes with respect for which the Indemnitee intends to which Owner could be liable for payment or indemnity seek indemnification hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax the Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunderLessee. If requested by Owner the Lessee in writing within 30 days after its receipt and provided that no Event of such noticeDefault is then continuing, such Tax the Indemnitee shall, shall at the expense of Owner the Lessee (including, including without limitation, all reasonable costs, expenses expenses, losses, legal and reasonable attorneys’ and accountants’ accounting fees and disbursements), disbursements incurred by the Indemnitee reasonably allocable to such contest) in good faith contest (or, at the Lessee's request, if permitted by applicable law, allow Owner permit the Lessee to contestcontest (and in such case, provide all reasonable cooperation to the Lessee) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (IA) resisting payment thereofthereof if practicable, (IIB) not paying the same except under protest protest, if protest is necessary and proper proper, or (IIIC) if the payment is be made, using reasonable efforts to obtain a refund thereof thereof, in an appropriate administrative and/or and judicial proceeding. If proceedings (including, without limitation, by pursuit of available appeals if requested to do so by Owner, the Tax Lessee and if the Lessee provides the Indemnitee with an opinion of outside counsel (at the expense of the Lessee) that such appeal has a realistic possibility of success; provided that no appeal shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals be taken to the United States Supreme Court). If In any case in which the Indemnitee shall determine to pursue the contest by payment of the Tax, the Lessee shall advance, on an interest free basis and at no net after tax cost to the extent Indemnitee, the amount of the Tax Indemnitee is able and any interest, penalties or additions to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated Tax required to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner be paid as a precondition to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax The Indemnitee shall consult with Owner the Lessee in good faith regarding the manner of contesting such claim and shall keep Owner the Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee contest and shall not fail to take any action expressly required by this Section 8.3.4 (includingrelease, without limitationsettle, any action regarding any appeal compromise or abandon the contest of an adverse determination with respect to any claim) or settle or compromise any claim the Tax without the prior written consent of the Owner (except Lessee, such consent not to be unreasonably withheld or delayed. If the Indemnitee shall obtain a refund of or be entitled to a credit against other liability for all or any part of such Taxes paid by the Lessee, the Indemnitee shall pay the Lessee the amount of such refund attributable to such Taxes paid by the Lessee, after deducting any costs and expenses that were incurred by the Indemnitee in connection therewith; provided that such amount shall not be payable before such time as contemplated the Lessee shall have made all payments and indemnities then due to the Indemnitee hereunder. If in addition to such refund the Indemnitee shall receive an amount representing interest on the amount of such refund, the Lessee shall be paid that proportion of such interest which is fairly attributable to Taxes paid by Section 8.3.4(b) the Lessee prior to the receipt of such refund; provided, however, that no amount shall be payable under this or (c)). (b) the preceding sentence during any period in which an Event of Default has occurred and is continuing. If the Indemnitee receives an award of attorneys' fees in a contest for which the Lessee has paid an allocable portion of the contest expenses, the Indemnitee shall pay to the Lessee the same proportion of the amount of such award as the amount of attorneys' fees paid or reimbursed by the Lessee bears to the total amount of the attorneys' fees actually incurred by the Indemnitee in conducting such contest. Notwithstanding the foregoing, in no event neither the Lessor nor the Trust Company shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such a Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any creates a material risk danger of sale, forfeiture, sale loss or loss creation of a lien on the Aircraft Aircraft, the Airframe, any Engine or any Part or on the Lessor (unless Owner or Head Lessee's) interest therein, and shall have made provisions not be obligated to protect continue the interests contest of any Tax if (i) the Lessee has failed to pay, as and to the extent provided above, the expenses of such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemniteecontest incurred by the Lessor or (ii) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease an Event of Default shall have has occurred and be continuing is then continuing, unless Owner such contest is being conducted as a claim for refund or the Lessee has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunderTax liability satisfactory to the Lessor or the Trust Company, as the case may be. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without neither the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on Lessor nor the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee Trust Company will not be required to contest the imposition of any Tax Taxes and shall be permitted to settle or compromise any claim without Owner’s the Lessee's consent if such Tax Indemnitee the Lessor or the Trust Company, as the case may be, (i) shall waive its right to indemnity under this Section 8.3 Clauses 5.6, 5.7, 5.10 and 8.4 with respect to such Tax Taxes (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), ) and (ii) shall pay to Owner the Lessee any amount previously paid or advanced by Owner the Lessee pursuant to this Section 8.3 Clause 5.12 with respect to such Tax other than, in the case of a contest conducted by means of payment of the Tax, plus interest at the rate that would have been payable by amount of the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Western Pacific Airlines Inc /De/)

Contest. (a) If a written claim is made against a Tax any Indemnitee for Taxes with respect any Tax that is subject to which Owner could be liable for payment or indemnity hereunderindemnification under this Section 10, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly Lessor will give Owner Lessee written notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner Lessee so requests in writing within 30 days after its receipt of such notice, the Indemnitee shall permit Lessee to contest the claim in the name of such Tax Indemnitee shallor in the name of Lessee, at to the expense of Owner extent permitted by law. However, if such claim together with other claims which could be made with respect to other transactions to which such Indemnitee is then a party could (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursementsif sustained) have an adverse effect on such Indemnitee's business or financial affairs (a "Special Claim"), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (IIIb) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee Lessee shall not be required permitted by law to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from contest a claim (other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment than a Special Claim) on behalf of such Tax Indemnitee, adversely affecting then such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any contest such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner claim in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contestfaith. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event claim shall a Tax be contested unless and until: (a) the Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless shall have received (i) Owner shall have agreed an indemnity reasonably satisfactory to pay such Tax Indemnitee on demand it for all reasonable costs and expenses incurred by such Tax Indemnitee reasonably expected to be paid in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable the claim (including attorneys' and accountants' fees and disbursements, ) and (ii) written acknowledgment by Lessee of its liability hereunder (if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunderis decided adversely) plus interest, penalties and additions to tax with in respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee Taxes; (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iiib) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in involve any material risk of forfeiturethe sale, sale forfeiture or loss of, or the creation of the Aircraft any Lien (unless Owner except a Lien which Lessee shall have made provisions to protect the interests of any such Tax Indemnitee bonded in a an amount and manner reasonably satisfactory to Lessor) on, the Aircraft or any part thereof or any interest therein; (c) if such Tax Indemnitee) contest shall be conducted in a manner requiring the payment of the claim, Lessee shall have advanced the amount required on an after-tax basis; (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivd) no Lease Default or Event of Default shall have occurred and be continuing unless Owner has provided security and Lessor shall be receiving all amounts of Rent when due, without reduction by reason of any Taxes; and (e) if such claim is a Special Claim, and if Lessor shall have received a legal opinion (at the expense of Lessee) from counsel satisfactory to Lessor indicating that a reasonable basis for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest contest exists. Lessor and penalties and an amount estimated Lessee shall in good faith by consider the other party's views regarding the conduct of the contest. Lessor and Lessee shall provide to each other, upon request, such Tax Indemnitee for expenses, reasonably obtainable information and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not other reasonable assistance as may be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability necessary or advisable for the contested amounts hereundereffective evaluation or conduct of such contest. Notwithstanding the foregoingforegoing provisions of this Section 10.4, if at any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to time Lessor waives its right of indemnification under this Section 8.3 without the written permission 10 in respect of Ownera claim, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome or if, after having received payment of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with indemnification from Lessee hereunder in respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect Lessor tenders such payment to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3Lessee, a Tax Indemnitee will then Lessee shall not be required entitled to contest the imposition of contest, or to continue to contest, any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Western Pacific Airlines Inc /De/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could Lessee may be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such the Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (within 15 days after its receipt and shall furnish Lessee with copies of the claim and all other writings received from the taxing authority relating to the claim; provided, however, that any failure to so notify Owner provide such notice or furnish such information shall not relieve Owner of its reduce or affect Lessee’s indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a precludes the contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such . The Tax Indemnitee shall be not pay such claim prior to 30 days after providing Lessee with such written notice, unless required to do so by law to take action prior or unless deferral of payment would cause adverse consequences to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Indemnitee. The Tax Indemnitee shall take no action for as long as it is legally able to do so in good faith, with due diligence and at Lessee’s expense, if requested in writing by Lessee, contest (it being understood that a including pursuing all appeals) in the name of the Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted requested by applicable Lessee and permissible as a matter of law, allow Owner in the name of Lessee), or shall at Lessee’s option permit Lessee to contest) through appropriate administrative and judicial proceedings contest in either the name of Lessee or with the Tax Indemnitee’s consent, which consent shall not be unreasonably withheld, in the name of the Tax Indemnitee, the validity, applicability or amount of such Taxes by by, (Ii) resisting payment thereof, thereof if practical; (IIii) not paying the same except under protest if protest is necessary and proper or proper; (IIIiii) if the payment is be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings; or (iv) taking such other reasonable action as is reasonably requested by Lessee from time to time. If requested to do so by OwnerNotwithstanding the foregoing provisions of this paragraph (h), the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals contest, or permit Lessee to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutcontest, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (iA) Owner Lessee shall have agreed in writing to pay such on an After-Tax Basis to the Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses incurred by such which the Tax Indemnitee may incur in connection with contesting such Taxesclaim, including, without limitation, all reasonable out and (B) no Event of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment Default of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such paymenttype specified in Section 14(a), (iiib), (c), (g) or (h) hereof shall have occurred and be continuing, (C) such Tax Indemnitee shall have reasonably determined that the action to be taken contest will not result in any material risk danger of forfeiturethe sale, sale forfeiture or loss of any of the Aircraft (Units unless Owner Lessee shall have made provisions provided security reasonably acceptable to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivD) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of such claim exceeds $50,000, (E) Lessee shall have provided the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Indemnitee with a written acknowledgement of Lessee’s obligations to indemnify the Tax Indemnitee for expenses, such Taxes if and to the extent the contest is not successful and (vF) prior to commencing any judicial action controlled by Owner, Owner Lessee shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect an opinion of independent counsel selected by the Tax Indemnitee and reasonably acceptable to such claim (and all directly related claims and claims based on Lessee to the outcome of effect that a reasonable basis exists to contest such claim) shall terminate, subject . If a Tax Indemnitee is obligated to Section 8.3.4(c), and subject to Section 8.3.4(ccontest a claim under this paragraph (h), such Tax Indemnitee shall repay not compromise or settle such claim without the express written permission of Lessee, which will not be unreasonably withheld. If it does so in the absence of such permission, Lessee’s obligation to Owner any amount previously paid or advanced to such Tax Indemnitee indemnify with respect to such claimclaim shall terminate. If a Tax Indemnitee is obligated to contest a claim under this paragraph (h), plus interest such Tax 28 Indemnitee may at the rate that would have been payable by the relevant Taxing Authority any time decline to take further action with respect to a refund the contest of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall first waive in writing its right to any indemnity payment by Lessee in respect of such claim. If a Tax Indemnitee determines in good faith that it must file a form with respect to or pay a Tax that is indemnifiable under this Section 8.3 21.1, such determination shall be treated as a written claim made against a Tax Indemnitee for Taxes with respect to such Tax which the Lessee may be liable for indemnity hereunder to which the contest provisions of this subsection (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (iih) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxapply.

Appears in 1 contract

Samples: Equipment Lease Agreement (Kansas City Southern)

Contest. (a) If a written claim is made against a Tax Indemnitee ------- for Taxes with respect to which Owner could the Lessee may be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such the Tax Indemnitee shall promptly give Owner the Lessee prompt notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing event within 30 days after its receipt receipt) and shall promptly furnish the Lessee with copies of such noticethe claim and all other writings received from the taxing authority relating to the claim; provided however, that the failure of such Tax Indemnitee shalltimely to provide such written notice shall not affect the Lessee's obligations under this except to the extent that the same precludes the Lessee from contesting such Taxes. The Tax Indemnitee shall not pay such claim prior to the 30 days after providing the Lessee with such written notice, unless required to do so by law or unless deferral of payment would cause adverse consequences to the Tax Indemnitee. The Tax Indemnitee shall in good faith, with due diligence and at the expense Lessee's expense, if requested in writing by the Lessee, contest (including pursuing all appeals permitted hereby) in the name of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest the Tax Indemnitee (or, if permitted requested by applicable the Lessee and permissible as a matter of law, allow Owner in the name of the Lessee or an Affiliate), or shall permit or, at such Tax Indemnitee's election, require the Lessee to contest) through appropriate administrative and judicial proceedings contest in either the name of the Lessee or an Affiliate or with the Tax Indemnitee's consent (not to be unreasonably withheld), in the name of the Tax Indemnitee the validity, applicability or amount of such Taxes by by, (Ia) resisting payment thereof, thereof if practical; (IIb) not paying the same except under protest if protest is necessary and proper or proper; (IIIc) if the payment is be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings; or (d) taking such other reasonable action as is reasonably requested by the Lessee from time to time. If requested provided, however, that if the contest is carried on in the name of the Lessee ----------------- or an Affiliate, or is being brought by the Lessee in the name of the Tax Indemnitee, such contest shall be undertaken by the Lessee, at the Lessee's expense and at no after-tax cost to do so by Ownerthe Tax Indemnitee, unless at such time the Tax Indemnitee determines in its reasonable good faith judgment that either (x) such claim is not severable from other Taxes in dispute before the same taxing authority without adversely affecting the Tax Indemnitee with respect to such other Taxes or the resolution of the dispute or (y) based upon the Lessee's conduct of such contest, the Lessee's continued control of such contest is reasonably likely to have a material adverse impact on the Tax Indemnitee in which case the Tax Indemnitee shall appeal conduct such contest. In no event shall any adverse administrative Tax Indemnitee be required or judicial decisionthe Lessee be permitted to contest any Taxes for which the Lessee is obligated to indemnify pursuant to this Section 7 unless: (1) such Lessee shall have acknowledged its liability to such Tax Indemnitee for an indemnity payment pursuant to this Section 7 as a result of such claim if and to the extent such Tax Indemnitee or the Lessee, except as the case may be, shall not prevail in the contest of such claim provided, however, that such acknowledgment shall be of no force or effect to the extent that such contest is resolved on a basis that clearly demonstrates that, without such acknowledgment pursuant the terms of this Agreement, the Lessee would not otherwise be liable to the Tax Indemnitee for the Tax so contested; (2) such Tax Indemnitee shall have received the opinion of independent tax counsel selected by such Tax Indemnitee and satisfactory to the Lessee furnished at Lessee's sole expense, to the effect that a reasonable basis exists for contesting such claim or, in the event of an appeal, that it is more likely than not that an appellate court will reverse or substantially modify the adverse determination (and provided that no appeal shall be required to pursue any appeals to the United States Supreme Court. If and to ); (3) the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner Lessee shall have agreed to pay such Tax Indemnitee on demand (and at no after-tax costs to such Tax Indemnitee) all reasonable costs and expenses incurred by that such Tax Indemnitee actually incurs in connection with contesting such Taxes, claim (including, without limitation, all costs, expenses, reasonable out of pocket costs legal and expenses and reasonable attorneys’ and accountants’ fees and accounting fees, disbursements, (ii) if such contest shall involve the payment of the claimpenalties, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties interest and additions to tax with respect thereto that are required to be paid prior to the commencement Taxes); (4) no Lease Default or Lease Event of such contest on an interest-free after-Tax basis to such Tax Indemnitee Default shall have occurred and shall have been continuing; (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii5) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk substantial danger of forfeituresale, sale forfeiture or loss of, or the creation of the Aircraft any Lien (unless Owner except if such Lessee shall have adequately bonded such Lien or otherwise made provisions provision to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) on the Leased Property or ClO2 Leased Property or any portion thereof or any interest therein; (provided6) the amount of such claims alone, that or, if the subject matter thereof shall be of a continuing or recurring nature, when aggregated with identical potential claims with respect to this transaction shall be at least $25,000; (7) if such Tax Indemnitee agrees to notify Owner contest shall be conducted in writing promptly after it becomes aware a manner requiring the payment of any such risk)the claim, (iv) no Lease Event of Default the Lessee shall have occurred paid the amount required (and be continuing unless Owner has provided security for its obligations hereunder by advancing at no after-tax costs to the Tax Indemnitee); and (8) such claim or liability does not involve the possibility of criminal sanctions or liability to such Tax Indemnitee before proceeding or continuing Indemnitee. The Lessee shall cooperate with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (any contest controlled and all directly related claims conducted by the Tax Indemnitee and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee consult with respect to such claim, plus interest at the rate that would have been payable by Lessee regarding the relevant Taxing Authority with respect to a refund conduct of such Tax. (c) Notwithstanding anything contained contest and in this Section 8.3furtherance of the foregoing, a Tax Indemnitee will the Lessee shall have the right to attend any proceeding to the extent relating to matters for which it is obligated to indemnify hereunder but shall not be required to contest the imposition of any Tax and shall be permitted to settle or compromise actively participate in any claim without Owner’s consent if such discussion. The Tax Indemnitee (i) shall waive not discriminate against any proposed adjustment due to its right to indemnity under this Section 8.3 indemnified nature as compared with respect to such other proposed adjustments involving potential tax liability of the Tax (Indemnitee and any directly related claim and any claim shall not, without the outcome written consent of which is determined based upon the outcome of such claim)Lessee, (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.settle such

Appears in 1 contract

Samples: Participation Agreement (Pope & Talbot Inc /De/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner that Lessee could be liable to pay or indemnify for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner and that Lessee could have an indemnity obligation for that Tax hereunder, such Tax Indemnitee shall promptly give Owner notice notify Lessee in writing of such claim (provided, that failure so to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such the failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) ), and shall take no action with respect to such claim without the Lessee's prior written consent of Owner for 30 days following the Lessee's receipt of such notice by Ownernotice; provided, that, in the case of a claim made against a Tax Indemnitee, if applicable Law requires such Tax Indemnitee shall be required by law to take action prior to before the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so avoid taking action (it being understood that and a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sxx for a refund prior to before the end of such 30-day period if (i)(A1)(aa) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest contest, or (Bbb) the failure to so pay would result in criminal penalties penalties, and (ii2) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, provided that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the Lessee's expense of Owner (including, without limitation, including all reasonable costs, expenses expenses, and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that the Tax Indemnitee is able to separate the contested issue or issues issue(s) from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, Transactions without (in the good faith judgment of such Tax Indemnitee, 's good faith judgment) adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is and reasonably necessary to conduct such contest (other than such Tax Indemnitee's federal income Tax returns) in which case Lessee shall keep such Tax Indemnitee reasonably informed concerning the progress of such contest. In If the case of a contest is being controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c))ss. (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Financing Agreement (Amtran Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sue for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 7.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b7.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the any Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Indenture Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 7.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c7.3.4(c), and subject to Section 8.3.4(c7.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.37.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 7.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 7.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Wheels Up Experience Inc.)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.indemnify

Appears in 1 contract

Samples: Note Purchase Agreement (United Airlines, Inc.)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Lessee could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (provided, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by OwnerLessee; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sue for a refund prior to the end of such 30-day period x xefund if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that that, in its good faith opinion, is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable lawlaw to be contested by the Lessee in its own name, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any contest such proceeding matter in its own name, if permitted by applicable law, and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contestcontest (other than such Tax Indemnitee's federal income tax returns), and Lessee shall keep such Tax Indemnitee reasonably informed concerning the progress of such contest and shall provide such Tax Indemnitee with copies of all submissions and judicial and administrative proceedings. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 9.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner Lessee (except as contemplated by Section 8.3.4(b9.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Lessee to pursue any contest) unless unless (i) Owner Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner Lessee shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free and after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Lessee any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner Lessee shall have made provisions to protect the interests of any such Tax Indemnitee and the Owner Participant in a manner reasonably satisfactory to such Tax IndemniteeIndemnitee and the Owner Participant) (provided, that such Tax Indemnitee agrees to notify Owner Lessee in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner Lessee has provided adequate security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by OwnerLessee, Owner Lessee shall have acknowledged its liability for such claim hereunder, provided that Owner Lessee shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner Lessee has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessee pursuant to this Section 8.3 9.3 without the written permission of OwnerLessee, Owner’s Lessee's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c9.3.4(c), and subject to Section 8.3.4(c9.3.4(c), such Tax Indemnitee shall repay to Owner Lessee any amount previously paid or advanced to such Tax Indemnitee with respect to such claimclaim (other then contest costs), plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.39.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s Lessee's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 9.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner Lessee any amount previously paid or advanced by Owner Lessee pursuant to this Section 8.3 9.3 (other than contest costs) with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner Lessee the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Continental Airlines Inc /De/)

Contest. If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (a) If including a written claim is made against a notice of such proceeding) for any Tax Indemnitee for Taxes with respect as to which Owner could be liable for payment or the Lessee may have an indemnity hereunderobligation, or if a any Tax Indemnitee makes a determination shall determine that a any Tax is due for as to which Owner could the Lessee may have an indemnity obligation hereundermay be payable, such Tax Indemnitee shall promptly give Owner notice notify the Lessee in writing of such claim (provided, that failure to so notify Owner and shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no any action with respect to such claim claim, proceeding or Tax without the prior written consent of Owner the Lessee for 30 thirty (30) days following the after receipt of such notice by Ownerthe Lessee unless the failure to take action could result in the imposition of penalties or fines or material danger of sale, forfeiture or loss of, or the creation of any Lien on, the Platform or the Property or any portion thereof or interest therein; provided, thathowever, in that any failure to provide such notice shall not relieve the case Lessee of any obligation to indemnify any Tax Indemnitee hereunder unless the Lessee is materially adversely affected as a claim made against a result of such failure and such failure arises out of or is caused by the misconduct or negligence (excluding imputed negligence) of such Tax Indemnitee; provided, further, however, that if such Tax Indemnitee shall be required by law or regulation to take action with respect to any such claim, proceeding or Tax prior to the end of such thirty (30-) day period, period such Tax Indemnitee shall, in such notice to Ownerthe Lessee, so inform Owner, the Lessee and such Tax Indemnitee shall not take no any action for as long as it is legally able with respect to do so (it being understood that a such claim, proceeding or Tax without the consent of the Lessee before the date on which such Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereundertake action. If requested by Owner in writing If, within 30 thirty (30) days after its receipt of such noticenotice (or such shorter period referred to in the preceding sentence), the Lessee shall request in writing that such Tax Indemnitee contest the imposition of such Tax, the Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements)the Lessee, in good faith contest (orincluding by pursuit of appeals, excluding any requirement to appeal to the U.S. Supreme Court), and shall not settle without the Lessee's consent, or if such contest can be pursued independently from any other proceeding involving a Tax liability of such Participation Agreement Tax Indemnitee (a "LESSEE-CONTROLLED CONTEST"), the Tax Indemnitee shall allow the Lessee to contest (in its own name, if permitted by applicable law, allow Owner law to contestdo so) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Tax (other than U.S. withholding or net income Taxes by indemnifiable hereunder) by, in the sole discretion of the Person conducting such contest: (I1) resisting payment thereof, ; (II2) not paying the same except under protest protest, if protest is shall be necessary and proper or proper; or (III3) if the payment is shall be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If requested to do so by Ownerproceedings; provided, the Tax Indemnitee shall appeal any adverse administrative or judicial decisionhowever, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a such Tax Indemnitee be required to pursue any contest (or permit the Lessee to permit Owner to pursue any contest) unless the imposition of any Tax for which the Lessee may be obligated unless: (it) Owner if a Payment Default or a Lease Event of a Default shall have occurred and be continuing, Lessee shall either (I) provide security for such tax indemnity obligations that is reasonably acceptable to such Tax Indemnitee or (II) pay such Tax, (u) in the case of net income Taxes indemnifiable hereunder, the amount of the claim and all future related claims exceeds $25,000, (v) in the case of net income and U.S. withholding Taxes indemnifiable hereunder, the Lessee shall have delivered to the Certificate Holders an opinion of tax counsel chosen by the Lessee and reasonably acceptable to the Certificate Holders to the effect that there is a reasonable basis to contest such claim, (w) in the case of a Lessee-Controlled Contest, the Lessee shall have acknowledged in writing its liability hereunder if the contest is unsuccessful; provided that such acknowledgment shall be of no force and effect if the final determination of the contest clearly articulates that the cause of the unfavorable disposition is one for which the Lessee is not otherwise liable hereunder, (x) the Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by that such Tax Indemnitee shall incur in connection with contesting such Taxes, including, without limitation, claim (including all reasonable out of pocket costs legal and expenses and reasonable attorneys’ and accountants’ accounting fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties disbursements and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such paymentinternally allocated time charges), (iiiy) such Tax Indemnitee the Certificate Holders shall have reasonably determined that the action to be taken will not result in any material risk danger of forfeituresale, sale forfeiture or loss of the Aircraft Platform or any portion thereof or interest therein, and (unless Owner z) if such contest shall have made provisions involve payment of the claim, the Lessee shall advance the amount thereof, plus interest, penalties and additions to protect the interests of any Tax with respect thereto, to such Tax Indemnitee in a manner reasonably satisfactory on an interest-free basis and on an After-Tax Basis to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner . The party in writing promptly after it becomes aware control of any such risk), (iv) no Lease Event of Default contest shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated consult in good faith by and cooperate with the other party regarding the conduct of any contest and the Tax Indemnitee shall allow the Lessee to attend all hearings at which unrelated issues are not discussed and to comment upon all related submissions in such Tax Indemnitee for expenses, Indemnitee-controlled contests and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereundervice versa. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3above, a Tax Indemnitee may settle and will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent Taxes if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Taxes and all future related Taxes and shall have paid to the Lessee any and all funds paid by the Lessee to such Tax Indemnitee with regard to such contested amount (other than those described in clause (x) of this Section 13(f)) plus any Participation Agreement interest which the Lessee paid on such funds. Any contest by the Lessee or at the Lessee's request shall be subject to the following requirements: (i) such contest shall be conducted in good faith by appropriate proceedings which have the effect of staying the enforcement of the lien for such Taxes and any directly related claim and any claim the outcome sale, forfeiture or other loss of which is determined based upon the outcome Platform during the pendency of such claim)contest, (ii) none of the Lessor, the Owner Trustee, the Agent and the Participants shall pay be subject to Owner any amount previously paid risk of criminal liability or advanced material civil liability by Owner pursuant to this Section 8.3 with respect to virtue of the matters being contested or such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxproceedings, and (iii) shall agree to discuss the Lessee, in accordance with Owner prudent practice, has set aside adequate reserves for the views or positions of any relevant Taxing Authority with respect payment thereof and has provided evidence reasonably acceptable to the imposition Agent, the Lessor and the Participants of such Taxreserves.

Appears in 1 contract

Samples: Participation Agreement (Cal Dive International Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sue for a refund prior to the end of such 30-day period if (i)(A) the failure xxilure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s 's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Southwest Airlines Co)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and sue xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee 42 -38- shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any 43 -39- amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s 's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Atlas Air Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner that Lessee could be liable to pay or indemnify for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner and that Lessee could have an indemnity obligation for that Tax hereunder, such Tax Indemnitee shall promptly give Owner notice notify Lessee in writing of such claim (providedPROVIDED, that failure so to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such the failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) ), and shall take no action with respect to such claim without the Lessee's prior written consent of Owner for 30 days following the Lessee's receipt of such notice by Ownernotice; providedPROVIDED, that, in the case of a claim made against a Tax Indemnitee, if applicable Law requires such Tax Indemnitee shall be required by law to take action prior to before the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so avoid taking action (it being understood that and a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sxx for a refund prior to before the end of such 30-day period if (i)(A1)(aa) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest contest, or (Bbb) the failure to so pay would result in criminal penalties penalties, and (ii2) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, provided that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the Lessee's expense of Owner (including, without limitation, including all reasonable costs, expenses expenses, and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that the Tax Indemnitee is able to separate the contested issue or issues issue(s) from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, Transactions without (in the good faith judgment of such Tax Indemnitee, 's good faith judgment) adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is and reasonably necessary to conduct such contest (other than such Tax Indemnitee's federal income Tax returns) in which case Lessee shall keep such Tax Indemnitee reasonably informed concerning the progress of such contest. In If the case of a contest is being controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c))ss. (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Financing Agreement (Amtran Inc)

Contest. LESSEE shall have the right to contest any taxes or assessments which LESSEE is obligated to pay under paragraphs 3.3 or 3.4 of this Lease. Such proceedings shall, if instituted, be conducted promptly at LESSEE’s own expense and free from all expense to LESSOR. Before instituting any such proceedings, LESSEE shall pay under protest any such taxes or assessments, or shall furnish to LESSOR a surety bond written by a company acceptable to LESSOR or other security acceptable to LESSOR, sufficient to cover the amount of such taxes or assessments, with interest for the period which such proceedings may reasonably be expected to take, and costs, securing the payment of such taxes or assessments, interest and costs in connection therewith when finally determined. Notwithstanding the furnishing of any such bond or security, LESSEE shall pay any such taxes or assessments at least thirty (a30) If a written claim is made days before the time when the Property or any part thereof, might be forfeited. The proceedings referred to in this paragraph 3.6 shall include appropriate appeals from any order or judgments therein, but all such proceedings shall be begun as soon as reasonably possible after the imposition or assessment of any such taxes or assessments and shall be prosecuted to final adjudication promptly. In the event of any reduction, cancellation or discharge, LESSEE shall pay the amount that shall be finally levied or assessed against a Tax Indemnitee for Taxes the Property or adjudicated to be due and payable, and, if there shall be any refund payable by the governmental authority with respect to which Owner could be liable for payment or indemnity hereunderthereto, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee LESSEE shall be entitled to pay receive and retain the Tax claimed and xxx for a refund prior same, subject, however, to the end apportionment proration provided in paragraph 3.5 of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest)this Lease. In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shallLESSOR, at the expense of Owner (includingLESSOR’s option, without limitationmay, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee but shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutobligated to, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of at LESSOR’s own expense contest any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information taxes or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemniteeassessments, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner which shall not be bound contested as set forth above, and, unless LESSEE shall promptly join with LESSOR in such contest and pay all costs and attorneys’ fees of LESSOR therein, LESSOR shall be entitled to receive and retain any refund payable by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee governmental authority with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxthereof. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement

Contest. (a) If a written claim is made against a Tax any Indemnitee for any Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunderLessee is responsible under Section 10.1 hereof, such Tax Indemnitee shall promptly give Owner notice notify Lessee. Without prejudice to any other rights Lessee may have in writing of such connection therewith (including, without limitation, any claim (provided, that for damages for a failure to so notify Owner give notice specified in the preceding sentence), the failure to provide such notice shall not relieve Owner of its indemnity affect Lessee's obligations hereunder to such Indemnitee unless such failure to notify effectively forecloses Owner’s rights to require a shall preclude the contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If reasonably requested by Owner Lessee in writing within 30 days after its receipt such notification, and upon determination that the amount of the claim exceeds $25,000 and that the action to be taken will not, in the sole opinion of Lessor, result in any material danger of the sale, forfeiture or loss of, or the creation of any Lien on the Aircraft or any interest therein (or in the event of such noticematerial danger of such sale, forfeiture, loss or Lien, Lessee shall have failed to obtain a bond satisfactory to such Indemnitee in such Indemnitee's sole discretion), such Tax Indemnitee shall, upon receipt of an indemnity reasonably satisfactory to it at the sole expense of Owner Lessee (including, including without limitation, all reasonable costs, expenses expenses, losses, legal and reasonable attorneys’ and accountants’ accountant's fees and disbursements, penalties and interest), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by by, in such Indemnitee's sole discretion, (Ii) resisting payment thereof, (IIii) not paying the same except under protest protest, if protest is necessary and proper or proper, and (IIIiii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decisionproceedings; provided, except however, that the Tax such Indemnitee shall not be required to pursue take any appeals action to contest a claim unless (w) Lessee provides an opinion of tax counsel of nationally recognized standing selected by Lessee and reasonably satisfactory to such Indemnitee, to the effect that there is a reasonable basis under the standard set forth in ABA Formal Opinion 85-352 or any applicable successor thereto in law and fact for contesting such proposed adjustment, which opinion shall be obtained at Lessee's sole cost and expense, (x) in the event that the subject matter of the contest is of a continuing nature and has previously been decided adversely pursuant to the contest provisions of this Section 10.5 by the highest court to which an appeal was taken, there has been a change in the law (including, without limitation, amendments to statutes or regulations, administrative rulings and court decisions) after such claim shall have been so previously decided and such Indemnitee shall have received an opinion of independent tax counsel selected by such Indemnitee, which opinion shall be obtained at Lessee's sole expense, to the effect that, as a result of such change it is (at least) as likely as not that the position which such Indemnitee or Lessee, as the case may be, will assert in any contest of such Tax would prevail, (y) prior to the commencement of any contest, Lessee shall have delivered to such Indemnitee a written acknowledgment of its obligation to fully indemnify such Indemnitee to the extent the contest is not successful and (z) in no event shall such Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. If and Any contest required pursuant to the extent preceding sentence shall, at the Tax option of such Indemnitee, be conducted by such Indemnitee is able to separate the contested issue or issues from other issues arising Lessee in the same administrative name of Lessee or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue If any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the involves payment of the claimTax in question, Owner Lessee shall advance the amount thereof (either make such payment directly to the extent indemnified hereunder) plus interest, penalties and additions appropriate authority or advance to tax with respect thereto that are required to be paid prior to the commencement of such contest Indemnitee sufficient funds (on an interest-free after-Tax basis basis) to make such Tax payment. Lessee agrees to give such Indemnitee (and such Tax reasonable notice of any contest prior to the commencement thereof. If an Indemnitee shall promptly obtain an actual refund or credit of all or any part of any Taxes paid by Lessee, such Indemnitee shall pay to Lessee the Owner any net realized tax benefits resulting from amount of such advance including refund or credit (taking into account any tax benefits savings resulting from making such paymenttherefrom), (iii) net of any expenses incurred by such Indemnitee and not already paid or reimbursed by Lessee, and any interest fairly attributable thereto plus an amount equal to the Tax savings realized by such Indemnitee as a result of any payment to Lessee pursuant to this paragraph; provided, however, that such amount shall have reasonably determined that the action to not be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner payable before Lessee shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory all payments and indemnities to such Tax Indemnitee) (Indemnitee then due under this Lease; and, provided, further, however, that the aggregate amount of all payments with respect to any Taxes made by such Tax Indemnitee agrees pursuant to notify Owner in writing promptly after it becomes aware this sentence shall not exceed the aggregate amount of any all payments made by Lessee to such risk)Indemnitee pursuant to this Article 10 with respect to such Taxes. Notwithstanding anything to the contrary herein, (iv) no Lease if a Default or Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contestcontinuing, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner Lessee shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law entitled, and fact that demonstrate that Owner has no liability for the contested amounts Lessor shall not be obligated, to commence or to continue any contest hereunder. Notwithstanding Lessee shall not be deemed to be in default under any of the foregoing, if any Tax indemnification provisions of this Article 10 while it or an Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner diligently prosecutes such contest pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything 10.5. Nothing contained in this Section 8.3, 10.5 shall require any Indemnitee to contest or permit Lessee to contest a Tax Indemnitee will not claim which it would otherwise be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to 10.5 if such Tax, plus interest at the rate Indemnitee shall waive payment by Lessee of any amount that would have been might otherwise be payable by the relevant Taxing Authority with Lessee under Section 10.1 by way of indemnity in respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxclaim.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Frontier Airlines Inc /Co/)

Contest. (ai) If a written Subject to (iii) below, in the case of any audit, claim is made against a for refund, or administrative or judicial proceeding involving any asserted Tax Indemnitee for Taxes liability or refund with respect to which Owner could be liable any Sold Entity (any such audit, claim for payment or indemnity hereunderrefund, or if proceeding relating to an asserted Tax liability referred to herein as a Tax Indemnitee makes a determination “Contest”) after the Closing Date that a Tax is due relates solely to Taxes for which Owner could have an indemnity obligation hereunderBuyer is indemnified under this Article IX (Indemnification; Tax Matters), such Tax Indemnitee the Sellers’ Representative shall promptly give Owner notice in writing control the conduct of such claim (providedContest, that failure but Buyer shall have the right to so notify Owner participate in such Contest at its own expense, and the Sellers’ Representative shall not relieve Owner be able to settle, compromise and/or concede any portion of such Contest that is reasonably likely to increase the Tax liability of Buyer or any of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim Affiliates for any Post-Closing Tax Period, without the prior written consent of Owner for 30 days following the receipt of such notice by OwnerBuyer, which consent shall not be unreasonably withheld, delayed or conditioned; provided, that, if such settlement, compromise or concession affects only the amount of the Aggregate Blocker Attributes or changes the relative amounts of the Blocker Closing Date NOLs or the Blocker Closing Date Aggregate Basis (including, for the avoidance of doubt, by requiring capitalization of amounts deducted by Target on a Tax Return for any Pre-Closing Tax Period), such Buyer’s written consent shall not be required. (ii) Subject to (iii) below, in the case of a claim made against a Contest after the Closing Date that relates both to Taxes for which Buyer is indemnified under this Article IX (Indemnification; Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerMatters) and the act of paying the Taxes for which Buyer is not indemnified under this Article IX (Indemnification; Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursementsMatters), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative Buyer and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee Sellers’ Representative shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to jointly control the conduct of any such proceeding Contest, and neither Buyer nor the Sellers’ Representative shall provide to Owner settle, compromise and/or concede such Contest without the consent of the other party, which consent shall not be unreasonably withheld, delayed or conditioned. (at Owner’s cost and expenseiii) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a the Target Tax IndemniteeAudit, such Tax Indemnitee the Sellers’ Representative shall consult with Owner in good faith regarding control the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress conduct of such contest. A Tax Indemnitee Contest, but Buyer shall have the right to participate from and after the Closing Date in such Contest at its own expense, and after the date hereof Sellers’ Representative shall not fail be able to take settle, compromise and/or concede any action expressly required by this Section 8.3.4 (includingportion of such Contest that is reasonably likely to increase the Tax liability of Buyer or any of its Affiliates for any Post-Closing Tax Period, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) Buyer, which consent shall not be unreasonably withheld, delayed or (c)). (b) Notwithstanding the foregoingconditioned; provided, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxesthat, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claimsettlement, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale compromise or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, concession affects only the amount of the Aggregate Blocker Attributes or changes the relative amounts of the Blocker Closing Date NOLs or the Blocker Closing Date Aggregate Basis (including, for the avoidance of doubt, by requiring capitalization of amounts deducted by Target on a Tax being contestedReturn for any Pre-Closing Tax Period), plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner Buyer’s written consent shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxrequired. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Securities Purchase Agreement (Ascent Capital Group, Inc.)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give notify Owner notice in writing of such claim (provided, that failure so to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such the failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) ), and shall take no action with respect to such claim without the Owner's prior written consent of Owner for 30 days following the Owner's receipt of such notice by Ownernotice; provided, that, in the case of a claim made against a Tax Indemnitee, if applicable law requires such Tax Indemnitee shall be required by law to take action prior to before the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so avoid taking action (it being understood that and a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to before the end of such 30-day period if (i)(A1)(aa) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest contest, or (Bbb) the failure to so pay would result in criminal penalties penalties, and (ii2) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, provided that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the Owner's expense of Owner (including, without limitation, including all reasonable costs, expenses expenses, and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, Transactions without (in the good faith judgment of such Tax Indemnitee, 's good faith judgment) adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is and reasonably necessary to conduct such contest. In If the case of a contest is being controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim claim, and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, S) 7.3.4 (including any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the Owner's prior written consent of the Owner (except as contemplated by Section 8.3.4(b(S) 7.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i1) Owner shall have agreed agrees to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by that such Tax Indemnitee incurs in connection with contesting such Taxes, including, without limitation, including all reasonable out of out-of-pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii2) if such contest shall involve involves the payment of the claim, Owner shall advance advances the amount thereof (to the extent indemnified hereunder) plus interest, penalties penalties, and additions to tax with respect thereto that are required to be paid prior to before commencing the commencement of such contest on an interest-free after-Tax tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance advance, including any tax benefits resulting from making such payment), (iii3) such Tax Indemnitee shall have does not reasonably determined determine that the action to be taken will not result in any material risk of forfeiture, sale sale, or loss of the Aircraft (unless Owner shall have made makes provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to shall notify Owner in writing promptly after it becomes aware of any such risk), (iv4) no Lease Event of Default shall have occurred and be continuing exists, unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee Indemnitee, before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v5) prior to before commencing any judicial action controlled by Owner, Owner shall have acknowledged acknowledges its liability for such claim hereunder, provided provided, that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall releasereleases, waivewaives, compromise compromises, or settle settles any claim which that may be indemnifiable by Owner pursuant to this Section 8.3 (S) 7.3 without the Owner's written permission of Ownerpermission, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly directly-related claims claims, and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c(S) 7.3.4(c), and subject to Section 8.3.4(c(S) 7.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3(S) 7.3, a Tax Indemnitee will not be required to contest the imposition of any Tax Tax, and shall be permitted to settle or compromise any claim without Owner’s consent 's consent, if such Tax Indemnitee (i1) shall waive waives its right to indemnity under this Section 8.3 (S) 7.3 with respect to such Tax (and any directly directly-related claim claim, and any claim the outcome of which is determined based upon the outcome of such claim), (ii2) shall pay pays to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 (S) 7.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax, and (iii3) shall agree agrees to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Note Purchase Agreement (Airtran Holdings Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and sue xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). PAGE 41 45 (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.have

Appears in 1 contract

Samples: Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sue for a refund prior to priox xo the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s 's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made against a any Tax Indemnitee for any Indemnified Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if (a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder"Claim"), such Tax Indemnitee shall will, as ------- promptly as practical after such tax Indemnitee has received written notification of such Claim, give Owner Borrower written notice of such Claim; provided that, a failure to give such notice in writing of such claim (provided, that failure to so notify Owner a timely manner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require preclude a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Claim for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify indemnification -------- ---- hereunder. If requested by Owner Borrower so requests in writing within 30 thirty (30) calendar days after its receipt of such notice, such Tax Indemnitee shall, at shall consult with Borrower to consider what action may be taken to resist payment of the expense of Owner (including, without limitation, all reasonable costs, expenses relevant Indemnified Taxes and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of following such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the consultation such Tax Indemnitee shall appeal may take any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising reasonable action in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment name of such Tax Indemnitee, adversely affecting such Tax Indemnitee, Indemnitee to contest the Claim in the name of such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is or, in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing's sole discretion, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxesthe name of Borrower, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interestpermitted by law; provided that, penalties and additions to tax with respect thereto that the following conditions are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) met: -------- ---- such Tax Indemnitee shall have reasonably determined that received adequate provision satisfactory to it for such Claim and any liability, expense or loss arising out of or related to such contest (including without limitation indemnification for all costs, expenses, losses, reasonable legal and accounting fees and disbursements, penalties and interest); the action to be taken contest will not result in any material risk danger of forfeiturethe sale, sale forfeiture or loss of of, or the Aircraft (unless Owner shall have made provisions to protect the interests creation of any such Tax Indemnitee Lien on, any Aircraft, any Engine, any Part, or any interest therein unless bonded in a manner reasonably satisfactory and amount acceptable to the Tax Indemnitees; if such Tax Indemnitee) (providedcontest shall be conducted in a manner requiring the payment of the Claim, that Borrower shall have paid such Tax Indemnitee agrees Claim to notify Owner in writing promptly after it becomes aware of any such risk), (iv) the extent required; no Lease Default or Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) continuing; prior to commencing any judicial action controlled by Owneradministrative appeal, Owner Borrower shall have acknowledged its liability for to such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability Tax Indemnitee hereunder for the contested amounts hereunderamount; such Tax Indemnitee shall have received a legal opinion (at the expense of Borrower) from counsel selected by such Tax Indemnitee (and reasonably satisfactory to Borrower) indicating that a reasonable basis for such contest exists; and such Tax Indemnitee has not received, or does not receive, an opinion from its external tax advisor concluding that the proposed actions to contest such Claim would trigger a significant possibility of creating a local franchise issue of the Tax Indemnitee (e.g. adverse publicity or impairing of the Tax Indemnitee's relationship with local regulators) or impairing the status of other open tax matters (e.g. tax audits) between such Tax Indemnitee and the local taxing authorities. Notwithstanding the foregoingforegoing provisions of this Section 8(b)(iii), if at any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify time such Tax Indemnitee with waives its right of indemnification under this Section 8(b) in respect to such claim (and all directly related claims and claims based on the outcome of a Claim, or if, after having received payment of indemnification from Borrower hereunder in respect of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c)Claim, such Tax Indemnitee tenders such payment to Borrower, then Borrower shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required entitled to contest the imposition of contest, or to continue to contest, any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such TaxClaim.

Appears in 1 contract

Samples: Credit Agreement (Frontier Airlines Inc /Co/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner that Lessee could be liable to pay or indemnify for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner and that Lessee could have an indemnity obligation for that Tax hereunder, such Tax Indemnitee shall promptly give Owner notice notify Lessee in writing of such claim (providedPROVIDED, that failure so to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such the failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) ), and shall take no action with respect to such claim without the Lessee's prior written consent of Owner for 30 days following the Lessee's receipt of such notice by Ownernotice; providedPROVIDED, that, in the case of a claim made against a Tax Indemnitee, if applicable Law requires such Tax Indemnitee shall be required by law to take action prior to before the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so avoid taking action (it being understood that and a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to before the end of such 30-day period if (i)(A1)(aa) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest contest, or (Bbb) the failure to so pay would result in criminal penalties penalties, and (ii2) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, provided that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the Lessee's expense of Owner (including, without limitation, including all reasonable costs, expenses expenses, and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that the Tax Indemnitee is able to separate the contested issue or issues issue(s) from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, Transactions without (in the good faith judgment of such Tax Indemnitee, 's good faith judgment) adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is and reasonably necessary to conduct such contest (other than such Tax Indemnitee's federal income Tax returns) in which case Lessee shall keep such Tax Indemnitee reasonably informed concerning the progress of such contest. In If the case of a contest is being controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c))ss. (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Amtran Inc)

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Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) PARTICIPATION AGREEMENT 2020-1 PAGE 29 resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the PARTICIPATION AGREEMENT 2020-1 PAGE 30 outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Note Purchase Agreement (Hawaiian Holdings Inc)

Contest. (a) If any Indemnitee receives a written claim is made against from any taxing authority for any Indemnified Tax (a Tax Claim”), such Indemnitee for Taxes shall give Lessee written notice of such Tax Claim within fifteen (15) Business Days after such Indemnitee receives such Tax Claim. (b) If reasonably requested by Lessee in a written notice delivered to such Indemnitee within thirty (30) days after the date on which such Indemnitee gives the notice required by Section 21.7(a) with respect to which Owner could a Tax Claim, and if the conditions described in Section 21.7(c) are satisfied and continue to be liable satisfied at all times during the contest, such Indemnitee shall contest such Tax Claim (or, at the option of such Indemnitee, may permit Lessee to contest such Tax Claim in the name of Lessee or in the name of such Indemnitee), in each case at Lessee’s expense, in accordance with applicable Law, and in a manner determined and controlled by the party that is conducting such contest (for example, by contesting the validity, applicability or amount of the Indemnified Taxes that are the subject of such Tax Claim by resisting payment or indemnity hereunderof such Indemnified Taxes, or by paying such Indemnified Taxes under protest if protest is necessary and proper, or by paying such indemnified Taxes and using reasonable efforts to obtain a Tax refund thereof), and such Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, shall not settle or compromise such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action Claim or refrain from taking any allowable appeal from any adverse administrative or judicial determination with respect to such claim Tax Claim without the prior written consent of Owner for 30 days following the receipt of Lessee (which consent shall not be unreasonably withheld), provided that such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice have the right to contest refuse to begin or continue (Bor to permit Lessee to begin or continue) the failure contest of any or all of the Indemnified Taxes that are the subject of such Tax Claim if such Indemnitee (x) waives in writing its right under this Article 21 to so pay would result in criminal penalties be indemnified for the Indemnified Taxes which such Indemnitee declines to contest and (iiy) repays to Lessee the amount (if any) which Lessee previously advanced to such Indemnitee in accordance with Section 21.7(c)(iv) with respect to the Indemnified Taxes that such Indemnitee declines to contest. Any request by Lessee to contest a Tax Claim pursuant to this Section 21.7 shall constitute an acknowledgment and agreement by Lessee that the Taxes which are the subject of such Tax Claim are Indemnified Taxes and that Lessee shall pay on demand and on an After-Tax Basis all costs and expenses paid or incurred by such Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt conduct of such notice, such Tax Indemnitee shall, at the expense of Owner contest (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements). (c) An Indemnitee shall have no obligation to begin or continue (or to permit Lessee to begin or continue) to contest any Tax Claim pursuant to this Section 21.7 unless all of the following conditions are satisfied at the time such contest is to be commenced and at all times during the contest: (i) no Event of Default (or Default consisting of an occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) shall have occurred and be continuing; (ii) contesting such Tax Claim would not, in good faith the opinion of Lessor, result in any risk of criminal or civil penalty or any reasonable possibility of any sale forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Lien for the Tax that is the 67 ARTICLE 21 TAXES; TAX INDEMNITY subject of such contest provided that enforcement of such Lien is stayed until the final determination of such contest and Lessee maintains adequate reserves with respect to such Lien in accordance with International Accounting Principles) on any Item of Equipment or any interest therein; (iii) the amount of the Indemnified Tax that is the subject of such Tax Claim exceeds ***** (or its equivalent in any other currency) or, if permitted by applicable lawthe Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, allow Owner to contestthe sum of (A) through appropriate administrative and judicial proceedings the validity, applicability or amount of the Indemnified Tax that is the subject of such Tax Claim plus (B) the aggregate amount of the Indemnified Taxes that would be required to be paid in all subsequent years during the remainder of the Term if the Tax Claim is not contested exceeds ***** (or its equivalent in any other currency); (iv) if such Indemnitee decides to contest such Tax Claim by (I) resisting payment thereof, (II) not paying the same except under protest if protest Indemnified Tax that is necessary the subject of such Tax Claim and proper or (III) if the payment is made, using reasonable efforts taking action to obtain a refund thereof thereof, Lessee shall have made an interest-free advance to such Indemnitee in an appropriate administrative and/or judicial proceeding. If requested amount equal to do so by Owner, the amount of the Indemnified Tax and shall have delivered to such Indemnitee shall appeal a written undertaking to indemnify such Indemnitee and its Affiliates for any adverse administrative Tax consequences to such Indemnitee or judicial decisionany of its Affiliates resulting from such interest-free advance; (v) Lessee shall be paying, except that the on demand and on an After-Tax Basis, all costs and expenses paid or incurred by such Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control connection with the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, ); (iivi) if requested by such contest Indemnitee, Lessee shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis have delivered to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized Indemnitee, at Lessee’s expense, a written opinion of independent tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith counsel selected by such Tax Indemnitee for expenses, and (v) prior reasonably acceptable to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law Lessee and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority having expertise with respect to the imposition Tax that is the subject of the Tax Claim to the effect that it is more likely than not that the requested contest of such Tax Claim will be successful; and (vii) if the sum of the Indemnified Taxes that are the subject of such Tax Claim exceeds *****, Lessee shall have delivered to such Indemnitee (or, if required by applicable Law, to the court in which the proceeding contesting such Tax Claim is to be conducted) a letter of credit, surety bond or other collateral in form, substance and amount satisfactory to such Indemnitee, in its sole discretion (exercised reasonably and in good faith), to secure the obligations of Lessee under this Article 21 with respect to the Indemnified Taxes that are the subject of such Tax Claim unless Lessee shall have paid, or shall have advanced pursuant to Section 21.7(c)(iv) funds to pay, such Tax Claim. (d) If and to the extent that an Indemnitee determines in good faith (i) that it has actually realized a reduction in its current liability for an Excluded Tax (a “Tax Saving”), as a result of any deduction, Tax credit or other Tax benefit for any Indemnified Tax which Lessee has paid to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, or (ii) that it has actually received a refund (in cash or as an offset against any liability of such Indemnitee for an Excluded Tax) (a “Refund”) of any Indemnified Tax paid by Lessee to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, then provided that such Indemnitee may do so without adversely affecting its right to retain such Tax Saving or Refund and provided that no Event of Default (or Default consisting of the occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) has occurred and is continuing, such Indemnitee shall pay to Lessee an amount equal to the sum of: ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.)

Contest. (a) If any Indemnitee receives a written claim is made against from any taxing authority for any Indemnified Tax (a Tax Claim”), such Indemnitee for Taxes shall give Lessee written notice of such Tax Claim within fifteen (15) Business Days after such Indemnitee receives such Tax Claim. (b) If reasonably requested by Lessee in a written notice delivered to such Indemnitee within thirty (30) days after the date on which such Indemnitee gives the notice required by Section 21.7(a) with respect to which Owner could a Tax Claim, and if the conditions described in Section 21.7(c) are satisfied and continue to be liable satisfied at all times during the contest, such Indemnitee shall contest such Tax Claim (or, at the option of such Indemnitee, may permit Lessee to contest such Tax Claim in the name of Lessee or in the name of such Indemnitee), in each case at Lessee’s expense, in accordance with applicable Law, and in a manner determined and controlled by the party that is conducting such contest (for example, by contesting the validity, applicability or amount of the Indemnified Taxes that are the subject of such Tax Claim by resisting payment or indemnity hereunderof such Indemnified Taxes, or by paying such Indemnified Taxes under protest if protest is necessary and proper, or by paying such Indemnified Taxes and using reasonable efforts to obtain a Tax refund thereof), and such Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, shall not settle or compromise such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action Claim or refrain from taking any allowable appeal from any adverse administrative or judicial determination with respect to such claim Tax Claim without the prior written consent of Owner for 30 days following the receipt of Lessee (which consent shall not be unreasonably withheld), provided that such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice have the right to contest refuse to begin or continue (Bor to permit Lessee to begin or continue) the failure contest of any or all of the Indemnified Taxes that are the subject of such Tax Claim if such Indemnitee (x) waives in writing its right under this Article 21 to so pay would result in criminal penalties be indemnified for the Indemnified Taxes which such Indemnitee declines to contest and (iiy) repays to Lessee the amount (if any) which Lessee previously advanced to such Indemnitee in accordance with Section 21.7(c)(iv) with respect to the Indemnified Taxes that such Indemnitee declines to contest. Any request by Lessee to contest a Tax Claim pursuant to this Section 21.7 shall constitute an acknowledgment and agreement by Lessee that the Taxes which are the subject of such Tax Claim are Indemnified Taxes and that Lessee shall pay on demand and on an After-Tax Basis all costs and expenses paid or incurred by such Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt conduct of such notice, such Tax Indemnitee shall, at the expense of Owner contest (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements). (c) An Indemnitee shall have no obligation to begin or continue (or to permit Lessee to begin or continue) to contest any Tax Claim pursuant to this Section 21.7 unless all of the following conditions are satisfied at the time such contest is to be commenced and at all times during the contest: (i) no Event of Default (or Default consisting of an occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) shall have occurred and be continuing; (ii) contesting such Tax Claim would not, in good faith the opinion of Lessor, result in any risk of criminal or civil penalty or any reasonable possibility of any sale forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Lien for the Tax that is the 66 ARTICLE 21 TAXES; TAX INDEMNITY subject of such contest provided that enforcement of such Lien is stayed until the final determination of such contest and Lessee maintains adequate reserves with respect to such Lien in accordance with International Accounting Principles) on any Item of Equipment or any interest therein; (iii) the amount of the Indemnified Tax that is the subject of such Tax Claim exceeds ***** (or its equivalent in any other currency) or, if permitted by applicable lawthe Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, allow Owner to contestthe sum of (A) through appropriate administrative and judicial proceedings the validity, applicability or amount of the Indemnified Tax that is the subject of such Tax Claim plus (B) the aggregate amount of the Indemnified Taxes that would be required to be paid in all subsequent years during the remainder of the Term if the Tax Claim is not contested exceeds ***** (or its equivalent in any other currency); (iv) if such Indemnitee decides to contest such Tax Claim by (I) resisting payment thereof, (II) not paying the same except under protest if protest Indemnified Tax that is necessary the subject of such Tax Claim and proper or (III) if the payment is made, using reasonable efforts taking action to obtain a refund thereof thereof, Lessee shall have made an interest-free advance to such Indemnitee in an appropriate administrative and/or judicial proceeding. If requested amount equal to do so by Owner, the amount of the Indemnified Tax and shall have delivered to such Indemnitee shall appeal a written undertaking to indemnify such Indemnitee and its Affiliates for any adverse administrative Tax consequences to such Indemnitee or judicial decisionany of its Affiliates resulting from such interest-free advance; (v) Lessee shall be paying, except that the on demand and on an After-Tax Basis, all costs and expenses paid or incurred by such Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control connection with the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, ); (iivi) if requested by such contest Indemnitee, Lessee shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis have delivered to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized Indemnitee, at Lessee’s expense, a written opinion of independent tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith counsel selected by such Tax Indemnitee for expenses, and (v) prior reasonably acceptable to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law Lessee and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority having expertise with respect to the imposition Tax that is the subject of the Tax Claim to the effect that it is more likely than not that the requested contest of such Tax Claim will be successful; and (vii) if the sum of the Indemnified Taxes that are the subject of such Tax Claim exceeds *****, Lessee shall have delivered to such Indemnitee (or, if required by applicable Law, to the court in which the proceeding contesting such Tax Claim is to be conducted) a letter of credit, surety bond or other collateral in form, substance and amount satisfactory to such Indemnitee, in its sole discretion (exercised reasonably and in good faith), to secure the obligations of Lessee under this Article 21 with respect to the Indemnified Taxes that are the subject of such Tax Claim unless Lessee shall have paid, or shall have advanced pursuant to Section 21.7(c)(iv) funds to pay, such Tax Claim. (d) If and to the extent that an Indemnitee determines in good faith (i) that it has actually realized a reduction in its current liability for an Excluded Tax (a “Tax Saving”), as a result of any deduction, Tax credit or other Tax benefit for any Indemnified Tax which Lessee has paid to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, or (ii) that it has actually received a refund (in cash or as an offset against any liability of such Indemnitee for an Excluded Tax) (a “Refund”) of any Indemnified Tax paid by Lessee to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, then provided that such Indemnitee may do so without adversely affecting its right to retain such Tax Saving or Refund and provided that no Event of Default (or Default consisting of the occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) has occurred and is continuing, such Indemnitee shall pay to Lessee an amount equal to the sum of: ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.)

Contest. (a) If a written claim is shall be made against a Tax any Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a any Tax Indemnitee makes a determination that a Tax is due in excess of $50,000 for which Owner could have an indemnity obligation hereunderLessee would be obligated to indemnify pursuant to Section 7.01, such Tax Indemnitee shall promptly give Owner notify Lessee after such Indemnitee becomes aware of such action and in any event within thirty (30) days after receipt by such Indemnitee of a written claim (but failure to notify Lessee within such thirty (30) day period shall not impair such Indemnitee’s right to indemnification under Section 7.01 except to the extent that Lessee’s rights to contest such claim shall have been materially impaired by such failure) and shall, to the extent permitted by Applicable Law, not pay the claim before the earlier of (i) thirty (30) days after giving Lessee notice and (ii) receipt of Lessee’s response. Subject to the conditions specified in writing this Section 7.04, if Lessee shall so request within the period referred to in the foregoing sentence, such Indemnitee shall, at Lessee’s expense reimbursed to such Indemnitee on an After-Tax Basis, contest the imposition, validity or applicability of such Tax. The ultimate control over the conduct of such contest (including the right to forgo any and all administrative appeals, proceedings, hearings and conferences in respect of such claim and the right to select the forum for such contest and determine whether any such contest shall be by (i) resisting payment of such Tax, (ii) paying such Tax under protest or (iii) paying such Tax and seeking a refund thereof) shall remain with such Indemnitee; provided, however, that failure such Indemnitee shall keep Lessee or its counsel reasonably informed as to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require the progress thereof, consult with Lessee within a contest of such claim) and shall take no reasonable period before any significant action with respect thereto is taken or omitted and consider in good faith any suggestions made by Lessee or its counsel; provided further that, subject to Indemnitee’s waiver rights described in Section 7.04(b) hereof, and provided that all conditions set forth in this Section 7.04 for the continuation of a contest shall then be satisfied, no such claim proceedings or litigation shall be settled or otherwise compromised without the prior written consent of Owner for 30 days following Lessee. If such Indemnitee so elects, such contest shall be conducted by Lessee in the receipt name of such notice by Owner; provided, that, Indemnitee (subject to the preceding proviso) and in the case of a claim made against a Tax Indemnitee, if no event shall such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall or Lessee be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right permitted to contest or to continue to contest, as the case may be, the imposition of any Tax for which Lessee is obligated to indemnify pursuant to Section 7.01 unless (BA) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep pay such information confidential other than to the extent necessary Indemnitee on demand and shall have paid as so demanded all reasonable costs and expenses that such Indemnitee may incur in order to contest the claim) furnish Owner connection with copies of any requests for information from any Taxing Authority relating to contesting such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner claim (including, without limitation, all reasonable costs, expenses expenses, losses, reasonable legal and reasonable attorneys’ and accountants’ accounting fees and disbursements)) on an After-Tax Basis, (B) Owner Participant shall have determined in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not, and the Indenture Trustee, at the direction of a Majority Interest of Noteholders, shall not have notified Lessee that it has determined in its good faith discretion that the action to be taken will, result in (x) any material risk of forfeiturea Lien (including without limitation, sale a Lien superior to the Indenture Trustee’s Lien under the Indenture) on, or of sale, forfeiture or loss of the Aircraft Buyer’s Transponders or any part thereof or any interest therein (unless Owner except if Lessee shall have made provisions provision to protect the interests of Owner Participant, Indenture Trustee and the Noteholders in a manner satisfactory to such Persons) or (y) the possible imposition of criminal or other similar XM-4 Participation Agreement sanctions on any Indemnitee, (C) if such Tax contest shall be conducted in a manner requiring the payment of the claim, Lessee shall have advanced on an interest-free basis an amount equal to the amount of such claim which such Indemnitee shall have elected to pay and Lessee shall have indemnified the Indemnitee in a manner reasonably satisfactory to the Indemnitee, for any adverse tax consequences from the receipt, or interest-free nature, of such advance, and (D) if an Event of Default or Bankruptcy Default shall have occurred and be continuing, Lessee shall have posted adequate security securing payment of the Tax subject to the contest and the expenses of the contest in a manner reasonably acceptable to such Indemnitee. (b) (An Indemnitee may at any time elect to settle or compromise any proposed claim or contest or decline to take any action or any further action with respect to a proposed claim or contest; provided, however, that if Lessee has properly requested such Tax action pursuant to this Article VII and has satisfied all conditions set forth in Section 7.04(a) for the continuation of a contest, such Indemnitee agrees shall notify Lessee that it waives its right to notify Owner any indemnity payment by Lessee that would otherwise be payable by Lessee pursuant to this Article VII in writing promptly after it becomes aware respect of such claim. An election by an Indemnitee to settle or compromise any proposed claim or contest or decline to take any action or take any further action with respect to a proposed claim or contest for any given taxable period shall not affect the rights and obligations of any other Indemnitee with respect to such riskproposed claim. An election by an Indemnitee to settle or compromise any proposed claim or contest or decline to take any action with respect to a proposed claim or contest (under circumstances where Lessee shall have properly requested action and satisfied all conditions for the continuation of a contest set forth in Section 7.04(a)) shall not affect the rights and obligations of such Indemnitee and Lessee hereunder in respect of any other taxable period or any other taxing authority except to the extent such election not to contest materially impairs as a legal or practical matter the ability of Lessee or an Indemnitee to contest any Tax with respect to such other taxable period or such other taxing authority for which such Indemnitee is indemnified pursuant to Section 7.01. Upon any such election by an Indemnitee, if Lessee shall have advanced an amount to an Indemnitee pursuant to clause (C) of Section 7.04(a), such Indemnitee shall repay the advance to Lessee, plus interest on such advance from the date of the making of such advance by Lessee to the day next preceding the day of repayment of such advance by such Indemnitee calculated at the applicable rate of the tax authority with respect to the claims to which the advance related; such repayment shall be made upon the occurrence of the earlier of (ivx) no Lease final adjudication of such contest (including a settlement thereof) and (y) such time as such Indemnitee shall elect to discontinue the contest as above provided; provided, however, notwithstanding the foregoing, such Indemnitee shall not be obligated to make any repayment to Lessee pursuant to this sentence for so long as any Payment Default, Bankruptcy Default or Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to but shall promptly make such Tax Indemnitee before proceeding or continuing with such contestpayment once all Payment Defaults, the amount Bankruptcy Defaults and Events of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner Default shall have acknowledged its liability for such claim hereunder, provided that Owner shall not no longer be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxcontinuing. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Xm Satellite Radio Holdings Inc)

Contest. (a) If a written claim is made against the Lessor, Trustee, a Tax Indemnitee Lessor Lender or Owner Participant for any Taxes with respect to for which the Lessee is responsible under this Agreement or if the Lessor, Trustee, a Lessor Lender or Owner could be liable for payment or Participant claims any indemnity hereunder, such Lessor, Trustee, Lessor Lender or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee Participant shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after of its receipt of any written claim or knowledge of any indemnity claim and shall provide the Lessee such noticeinformation regarding such claim as the Lessee may reasonably request. If the Lessee disputes the payment of any Taxes payable by the Lessor, Trustee, a Lessor Lender or Owner Participant, as the case may be, for which the Lessee is responsible under this Agreement or the payment of any indemnity claimed hereunder, the Lessor, Trustee, Lessor Lender or Owner Participant, as the case may be, will take such Tax Indemnitee shallaction as the Lessee may reasonably request, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements)Lessee's expense, in good faith diligently to contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (Ii) resisting payment thereofthereof to the extent permitted by applicable law, (IIii) not paying the same except under protest protest, if protest is necessary and proper or proper, (IIIiii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decisionproceedings, except and (iv) considering in good faith any other reasonable action as the Lessee may reasonably request, but will not be obliged to take any such action: a. which the Lessor, Trustee, Lessor Lender or Owner Participant, as the case may be, considers, in its reasonable judgment, may materially prejudice it; b. unless the Lessee shall have provided such Person with an opinion of counsel, reasonably acceptable to such Person, that a reasonable basis exists for such contest, which the Lessor, Trustee, Lessor Lender or Owner Participant, as the case may be, considers does not have a reasonable prospect of success; c. for which the Lessee has not made adequate provision to the reasonable satisfaction of the Lessor, Trustee, Lessor Lender or Owner Participant, as the case may be, in respect of the expense concerned; or d. if such action gives rise to any material likelihood of the Aircraft or any interest therein being sold, forfeited or otherwise lost or of criminal liability on the part of the Lessor, Trustee, Lessor Lender or Owner Participant, as the case may be. In the event of a contest of any Taxes hereunder, the Lessor, Trustee, Lessor Lender or Owner Participant (as the case may be) shall keep the Lessee informed as to the progress of the contest and provide the Lessee with copies of correspondence and other documents received by such Lessor, Trustee, Lessor Lender or Owner Participant (as the case may be) from the taxing authority, consult with the Lessee if requested by the Lessee, make available for review and comment to the Lessee any written documents or materials relating to the contest that such Lessor, Trustee, Lessor Lender or Owner Participant (as the case may be) proposes to submit to the taxing authority, forward copies of all material submissions made in such contest, consider in good faith any request concerning the conduct of any such contest and without waiving its right to be indemnified hereunder with respect to such claim shall not settle any such claim or contest pursuant to this provision without the written consent of the Lessee. Any contest required pursuant to the preceding sentence shall, at the option of such Lessor, Trustee, Lessor Lender or Owner Participant (as the case may be) be conducted by such Lessor, Trustee, Lessor Lender or Owner Participant (as the case may be) or the Lessee in the name of the Lessee or such Lessor, Trustee, Lessor Lender or Owner Participant; provided however that if a claim with respect to a Tax for which the Lessee has agreed to indemnify the Lessor, Trustee, Lessor Lender or Owner Participant (as the case may be) can be contested separately from the contest of any other Tax of such Lessor, Trustee, Lessor Lender or Owner Participant and in the name of the Lessee, and the separation of the contest of such Tax does not prejudice such Lessor, Trustee, Lessor Lender or Owner Participant in any way, then such Lessor, Trustee, Lessor Lender or Owner Participant shall permit the Lessee, at the Lessee's sole cost and expense, to contest such claim in the Lessee's name. If the Lessor, Trustee, Lessor Lender or Owner Participant (as the case may be) shall obtain a refund or credit of all or any part of any Taxes paid by the Lessee, such Lessor, Trustee, Lessor Lender or Owner Participant shall pay to the Lessee the amount of such refund or credit (taking into account any Tax savings resulting therefrom), net of expenses not already paid or reimbursed by the Lessee, and any interest fairly attributable thereto plus an amount equal to the Tax Indemnitee savings realized by such Lessor, Trustee, Lessor Lender or Owner Participant as a result of any payment to the Lessee pursuant to this sentence. The Lessee shall not be required to pursue any appeals make payment to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the Lessor, Trustee, a Lessor Lender or Owner Participant on any indemnification claim being diligently contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without Clause 5.10 unless (and only to the written permission extent) the Lessor, Trustee or Owner Participant has been required to make any payment of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect taxes giving rise to such claim (and all directly related claims and claims based on the outcome of such indemnification claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Airfund International Limited Partnership)

Contest. (a) If Lessor receives a written claim is made against a for any Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have Lessee would be required to pay an indemnity obligation hereunderpursuant to Clause 1, such Tax Indemnitee Clause 2 or Clause 3 of this Schedule 11, Lessor shall notify Lessee promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect , provided that any failure to such claim without the prior written consent of Owner for 30 days following the receipt of provide such notice by Owner; providedwill not relieve Lessee of any indemnification obligation pursuant to Clause 1, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest Clause 2 or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than Clause 3 except to the extent necessary in order that Lessee's ability to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to defend such Taxes with respect to which Owner may be required to indemnify hereunderclaim has been materially adversely affected by such failure. If requested by Owner Lessee in writing within 30 days promptly after its receipt of such Lessor's notice, such Tax Indemnitee Lessor shall, upon receipt of indemnity satisfactory to it and at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ expenses, legal and accountants' fees and disbursements), and penalties, interest and additions to tax incurred in contesting such claim) in good faith contest or (or, if permitted by applicable law, allow Owner Law) permit Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of contest such Taxes claim by (Ii) resisting payment thereofthereof if practicable and appropriate, (IIii) not paying the same except under protest if protest is necessary and proper proper, or (IIIiii) if the payment is made, using reasonable efforts to obtain a refund thereof of such Taxes in an appropriate administrative and/or and judicial proceedingproceedings. If requested Lessor shall determine the method of any contest conducted by Lessor and (in good faith consultation with Lessee) control the conduct thereof. Lessee shall determine the method of any contest conducted by Lessee and (in good faith consultation with Lessor) control the conduct thereof. Lessee shall pay in full all payments of Rent and other amounts payable pursuant to do so by Ownerthe Operative Documents, the Tax Indemnitee shall appeal without reduction for or on account of any adverse administrative or judicial decisionTax, except that the Tax Indemnitee while such contest is continuing. Lessor shall not be required to pursue any appeals contest, or to continue to contest, a claim for Taxes under this Clause 7 if (x) such contest would result in a risk of criminal penalties or of a sale, forfeiture or loss of, or the United States Supreme Court. If and imposition of a Lien (other than a Permitted Lien) on (except to the extent the Tax Indemnitee is able covered by a bond reasonably acceptable to separate the contested issue Lessor), or issues from other issues arising in the same administrative (y) Lessee shall not have furnished an opinion of independent tax counsel selected by Lessor and reasonably satisfactory to Lessee, that a reasonable basis exists for such contest, or judicial proceeding that are unrelated (z) a Default or an Event of Default shall be continuing (unless Lessee shall have provided security reasonably satisfactory to Lessor securing Lessee's performance of its obligations under this Schedule 11). If Lessor contests any claim for Taxes by making a payment and seeking a refund thereof, then Lessee shall advance to Lessor, on an interest-free basis, an amount equal to the transactions contemplated Taxes to be paid by Lessor in connection with the Operative Agreements without, in the good faith judgment contest and shall indemnify Lessor on an After-Tax Basis for any adverse tax consequences to Lessor of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control interest-free advance. Upon the conduct final determination of any contest pursuant to this Clause 7 in respect of any Taxes for which Lessee shall have made an advance to Lessor in accordance with the immediately preceding sentence, the amount of Lessee's obligation shall be determined as if such proceeding advance had not been made; any indemnity obligation of Lessee to Lessor under this Schedule 11 and Lessor's obligation to repay the advance will be satisfied first by setoff against each other, and any difference owing by either party shall provide to Owner (at Owner’s cost and expense) with be paid within ten days after such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c))final determination. (b) Notwithstanding If Lessor obtains a refund of all or any part of any Taxes for which a full indemnity was paid by Lessee, Lessor shall pay Lessee the foregoingamount of such refund, reduced by any Taxes imposed on Lessor on receipt or accrual of such refund and increased by any Taxes saved by Lessor by reason of the deductibility of such payment by Lessor. If, in no event addition to such refund, Lessor receives an amount of interest on such refund, Lessor shall a Tax Indemnitee pay to Lessee the portion of such interest which is fairly attributable to such refund, reduced by any Taxes imposed by Lessor on receipt or accrual of such interest and increased by any Taxes saved by reason of the deductibility of such payment by Lessor. Lessor shall not be required to pursue make any contest (or payment to permit Owner Lessee pursuant to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs this Clause 7 if, and expenses incurred by such Tax Indemnitee in connection with contesting such Taxesfor so long as, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security continuing. (c) Lessor in its sole discretion (by written notice to Lessee) may waive its rights to indemnification pursuant to Clause 1 with respect to any claim for its obligations hereunder by advancing to such any Tax Indemnitee before proceeding and may refrain from contesting or continuing the contest of such claim, in which event Lessee shall have no obligation to indemnify Lessor for the Taxes that are the subject of such claim. If Lessor agrees to a settlement of any contest conducted pursuant to this Clause 7 without the prior written consent of Lessee, which consent shall not be unreasonably withheld, then Lessor shall be deemed to have waived its rights to the indemnification provided for in Clause 7 with respect to the Tax liability accepted in such contestsettlement. SCHEDULE 12 FORM OF LEASE TERMINATION CERTIFICATE The undersigned hereby certify that the Aircraft Lease Agreement dated as of January 5, 1999 between the undersigned Lessor and undersigned Lessee, and as further described in the Appendix attached hereto, has terminated and the aircraft and aircraft engines covered thereby are no longer subject to the terms thereof. This certificate may be executed in one or more counterparts each of which when taken together shall constitute one and the same instrument. DATED this __________ day of ____________________, __________ LESSOR LESSEE AEROUSA, INC. VANGUARD AIRLINES, INC. By:________________________________ By:__________________________ Title:_______________________________ Title:__________________________ APPENDIX FAA RECORDING DATE FAA CONVEYANCE NO. SCHEDULE 13 1. Lessor hereby delivers and leases to Lessee under the Agreement and Lessee hereby accepts, acknowledges receipt of possession and leases from Lessor under the Agreement, that certain Boeing 737-200A commercial jet Aircraft, and the two (2) Pxxxx & Wxxxxxx JT8D-15 Engines (each of which Engines has 750 or more rated takeoff horsepower or the equivalent of such horsepower) described in Schedule 1 hereto, together with the Aircraft Documents described in the Agreement (the "Delivered Aircraft"). 2. The Delivery Date of the Delivered Aircraft is the date of this Lease Supplement set forth in the opening paragraph hereof. 3. The Term for the Delivered Aircraft shall commence on the Delivery Date and shall end on the Expiry Date, which shall be _______________________________________. 4. The amount of Rent for the Tax being contestedDelivered Aircraft is set forth in Schedule 10 to the Agreement. 5. Lessee hereby confirms to Lessor that (i) the Delivered Aircraft and each delivered Engine have been duly marked in accordance with the terms of Clause 8.6(d) of the Agreement, plus any interest (ii) the Aircraft is insured as required by the Agreement, (iii) the representations and penalties and an amount estimated warranties of Lessee referred to in good faith by such Tax Indemnitee Clause 2 of the Agreement are hereby repeated with effect as of the date first above written, (iv) having inspected the Delivered Aircraft, Lessee acknowledges that the Delivered Aircraft satisfies all conditions required for expensesLessee's acceptance of delivery as set forth in the Agreement, and (v) prior the execution and delivery of this Lease Supplement signifies absolute and irrevocable acceptance by Lessee of the Delivered Aircraft for all purposes hereof and of the Agreement. 6. All of the terms and provisions of the Agreement are hereby incorporated by reference in this Lease Supplement to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment the same extent as if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunderfully set forth herein. 7. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which This Lease Supplement may be indemnifiable by Owner pursuant executed in any number of counterparts; each of such counterparts, shall for all purposes be deemed to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (be an original; and all directly related claims such counterparts shall together constitute but one and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxsame Lease Supplement. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Vanguard Airlines Inc \De\)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner that Lessee could be liable to pay or indemnify for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner and that Lessee could have an indemnity obligation for that Tax hereunder, such Tax Indemnitee shall promptly give Owner notice notify Lessee in writing of such claim (provided, that failure so to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such the failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) ), and shall take no action with respect to such claim without the Lessee's prior written consent of Owner for 30 days following the Lessee's receipt of such notice by Ownernotice; provided, that, in the case of a claim made against a Tax Indemnitee, if applicable Law requires such Tax Indemnitee shall be required by law to take action prior to before the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so avoid taking action (it being understood that and a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to before the end of such 30-day period if (i)(A1)(aa) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest contest, or (Bbb) the failure to so pay would result in criminal penalties penalties, and (ii2) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, provided that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the Lessee's expense of Owner (including, without limitation, including all reasonable costs, expenses expenses, and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that the Tax Indemnitee is able to separate the contested issue or issues issue(s) from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, Transactions without (in the good faith judgment of such Tax Indemnitee, 's good faith judgment) adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is and reasonably necessary to conduct such contest (other than such Tax Indemnitee's federal income Tax returns) in which case Lessee shall keep such Tax Indemnitee reasonably informed concerning the progress of such contest. In If the case of a contest is being controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c))ss. (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Amtran Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee or Lessee for any Taxes with respect for which Lessee is obligated to which Owner could be liable for payment or indemnity hereundera Tax Indemnitee, or if notice is received by a Tax Indemnitee makes or Lessee from a determination Government Entity that such a Tax claim is due for which Owner could have an indemnity obligation hereundergoing to made, such Tax Indemnitee shall notify Lessee, or Lessee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to as the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner case may be required to indemnify hereunderbe. If requested by Owner Lessee in writing within 30 thirty (30) days after its such notification, the Tax Indemnitee agrees, upon receipt of such notice, such Tax Indemnitee shall, indemnity satisfactory to it and at the expense of Owner Lessee (including, including without limitation, all reasonable costs, expenses expenses, losses, legal and reasonable attorneys’ and accountants’ accounting fees and disbursements), penalties and interest) in good faith to contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes in the forum selected by such Tax Indemnitee by (IA) resisting payment thereofthereof if practicable, (II) not paying the same except under protest if protest is necessary and proper or (IIIB) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If requested to do so by Ownerproceedings; provided, the however, no Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 to contest a claim unless (including1) Lessee provides the Tax Indemnitee, without limitationtogether with such written request, any action regarding any appeal with an opinion of an adverse determination with respect independent tax counsel reasonably satisfactory to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required both as to pursue any contest (or counsel and substance, to permit Owner to pursue any the effect that there is a meritorious basis for such contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii2) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material the risk of forfeiturean imposition of criminal penalties or, sale in Lessor’s reasonable judgment, any risk of any sale, forfeiture or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of Aircraft, any such Tax Indemnitee Engine or any Part, or any interest in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk)thereof, (iv3) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing continuing, (4) if Lessee determines reasonably to pay such Tax and seek a refund, Lessee has advanced the amount of such Tax to make such payment, (5) the amount of the Taxes at issue exceeds US$5,000, and (6) Lessee shall have provided ALA MSN 2851 – Global Crossing Airlines the Tax Indemnitee before proceeding or continuing with a written acknowledgment of liability if and to the extent that the contest is not successful. Upon written request of Lessee and provided that the Tax Indemnitee determines in good faith that no Tax Indemnitee will be adversely affected by Lessee’s conduct of such contest, the amount Tax Indemnitee shall allow Lessee to prosecute such tax contest in the name of the Tax being contestedIndemnitee (or if possible in the name of Lessee) by granting an appropriate power of attorney or other authorization and such other action as is reasonably necessary, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expensesor, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions upon written request of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c)Lessee, such Tax Indemnitee shall repay consult with Lessee, keep Lessee informed regarding the tax contest and consider in good faith the recommendations of Lessee as to Owner any amount previously paid or advanced to such the prosecution of the tax contest. If the Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to shall obtain a refund of all or any part of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Taxes for which Lessee has paid an indemnity hereunder or advanced funds to the Tax Indemnitee will not be required as described above, the Tax Indemnitee shall pay Lessee the amount of such refund, after deducting all out-of-pocket costs and expenses that were incurred by Lessor or Tax Indemnitee in connection therewith. If in addition to contest such refund an amount representing expenses, attorney’s fees or interest on the imposition amount of any Tax and such refund is received, Lessee shall be permitted paid such expenses, attorney’s fees and that proportion of such interest which is fairly attributable to settle or compromise any claim without Owner’s consent if taxes, fees and other charges paid by Lessee prior to the receipt of such Tax Indemnitee (i) refund; provided, however, that no amount shall waive its right to indemnity be payable under this Section 8.3 with respect to such Tax (and or the preceding sentence during any directly related claim and any claim the outcome of period in which a Default is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxcontinuing.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Global Crossing Airlines Group Inc.)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Lessee could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (provided, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by OwnerLessee; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and sue xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 9.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner Lessee (except as contemplated by Section 8.3.4(b9.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Lessee to pursue any contest) unless unless (i) Owner Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner Lessee shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Lessee any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner Lessee shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner Lessee in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner Lessee has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by OwnerLessee, Owner Lessee shall have acknowledged its liability for such claim hereunder, provided that Owner Lessee shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner Lessee has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessee pursuant to this Section 8.3 9.3 without the written permission of OwnerLessee, Owner’s Lessee's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c9.3.4(c), and subject to Section 8.3.4(c9.3.4(c), such Tax Indemnitee shall repay to Owner Lessee any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.39.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s Lessee's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 9.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner Lessee any amount previously paid or advanced by Owner Lessee pursuant to this Section 8.3 9.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner Lessee the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Atlas Air Inc)

Contest. (a) If a written claim is made against a and received by any Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a any Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereundersuch Tax Indemnitee under this Schedule 5, such Tax Indemnitee will notify Lessee promptly in writing of such claim, but the failure to so notify will not affect any obligation of Lessee under this Schedule 5, provided that nothing contained herein will prevent Lessee from making a claim for any damages it suffers with respect to an obligation to indemnify such Tax Indemnitee hereunder solely as a result of such failure to notify by such Tax Indemnitee (except to the extent that Xxxxxx's or such Tax Indemnitee's successful defence of such claim is precluded thereby). If requested by Owner Xxxxxx in writing within 30 days after its receipt of such noticewriting, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith will contest (or, if permitted by applicable lawin its sole discretion, allow Owner Lessee to contest) through appropriate administrative such claim, provided that (1) no Event of Default has occurred and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereofis then continuing, (II2) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay Lessee will reimburse such Tax Indemnitee on demand for all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting for the purpose of conducting such Taxescontest, including, including without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursementsany attorney, accountant’s or advisory fees, (ii3) before such Tax Indemnitee commences any administrative or judicial action, Lessee will acknowledge its obligation in writing to indemnify such Tax Indemnitee for the amount of Tax in controversy if the contest is unsuccessful, (4) Lessee provides and pays for an opinion of independent tax counsel mutually acceptable to Lessee and such Tax Indemnitee that there is a reasonable basis for the contest, (5) there is no material risk of forfeiture of the Aircraft as a result of such contest, and (6) if such Tax Indemnitee decides to initiate such contest shall involve by paying the payment of the claimTax claimed and claiming a refund thereof, Owner shall advance Xxxxxx will have advanced to such Tax Indemnitee the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest Tax on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall will have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation agreed to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome for any adverse tax consequences of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxinterest-free loan. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Aircastle LTD)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Lessee could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (provided, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by OwnerLessee; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sue for a refund rxxxnd prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 9.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner Lessee (except as contemplated by Section 8.3.4(b9.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Lessee to pursue any contest) unless ) (i) Owner Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner Lessee shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Lessee any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner Lessee shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner Lessee in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner Lessee has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by OwnerLessee, Owner Lessee shall have acknowledged its liability for such claim hereunder, provided that Owner Lessee shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner Lessee has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessee pursuant to this Section 8.3 9.3 without the written permission of OwnerLessee, Owner’s Lessee's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c9.3.4(c), and subject to Section 8.3.4(c9.3.4(c), such Tax Indemnitee shall repay to Owner Lessee any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.39.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s Lessee's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 9.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner Lessee any amount previously paid or advanced by Owner Lessee pursuant to this Section 8.3 9.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner Lessee the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could Lessee may be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such the Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (after its receipt and shall furnish Lessee with copies of the claim and all other writings received from the taxing authority relating to the claim; provided, however, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations any obligation to indemnify the Tax Indemnitee hereunder unless such failure shall effectively preclude Lessee’s ability to notify effectively forecloses Owner’s rights to require a initiate or continue the contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such . The Tax Indemnitee shall be not pay such claim prior to 30 days after providing Lessee with such written notice, unless required to do so by law to take action prior or unless deferral of payment would cause adverse consequences to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Indemnitee. The Tax Indemnitee shall take no action for as long as it is legally able to do so in good faith, with due diligence and at Lessee’s expense, if requested in writing by Lessee, contest (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In additionincluding pursuing all appeals, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary United States Supreme Court) in order to contest the claim) furnish Owner with copies name of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such the Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted requested by applicable Lessee and permissible as a matter of law, allow Owner in the name of Lessee), or shall at Lessee’s option permit Lessee to contest) through appropriate administrative and judicial proceedings contest in either the name of Lessee or with the Tax Indemnitee’s consent, which consent shall not be unreasonably withheld, in the name of the Tax Indemnitee, the validity, applicability or amount of such Taxes by by, (Ii) resisting payment thereof, thereof if practical; (IIii) not paying the same except under protest if protest is necessary and proper or proper; (IIIiii) if the payment is be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If proceedings; or (iv) taking such other reasonable action as is reasonably requested by Lessee from time to do so by Ownertime; Notwithstanding the foregoing provisions of this paragraph (h), the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals contest, or permit Lessee to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutcontest, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (iA) Owner Lessee shall have agreed in writing to pay such on an After-Tax Basis to the Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses incurred by such which the Tax Indemnitee may incur in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursementsclaim, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivB) no Lease Event of Default shall have occurred and be continuing continuing, (C) such contest will not result in any material danger of the sale, forfeiture or loss of any of the Units unless Owner has Lessee shall have provided security reasonably acceptable to the Tax Indemnitee, and there is no risk of imposition of any criminal penalties or material civil liability or penalty as a result of such Tax Claim, (D) if such contest involves payment of such Tax, Lessee will either lend to the Tax Indemnitee on an interest-free basis (without reduction for its obligations hereunder any Tax savings that the Tax Indemnitee may realize as a result of the payment of such Tax), which loan will be repaid in full by advancing to the Tax Indemnitee upon the conclusion of the contest or pay such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith payable by Lessee pursuant to Section 7.1(a) above with respect to such Tax Indemnitee for expensesTax, and (vE) prior to commencing any judicial action controlled by Ownerupon request of a Tax Indemnitee, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify Lessee furnishes such Tax Indemnitee with respect an opinion of Lessee’s counsel that there is a reasonable basis for the position to be asserted in such contest and in the case of an appeal, that there is a substantial likelihood that the adverse decision will be reversed or substantially modified on appeal. If a Tax Indemnitee is obligated to contest a claim under this paragraph (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(ch), such Tax Indemnitee shall repay not compromise or settle such claim without the express written permission of Lessee. If it does so in the absence of such permission, Lessee’s obligation to Owner any amount previously paid or advanced to such Tax Indemnitee indemnify with respect to such claimclaim shall terminate. If a Tax Indemnitee is obligated to contest a claim under this paragraph (h), plus interest such Tax Indemnitee may at the rate that would have been payable by the relevant Taxing Authority any time decline to take further action with respect to a refund the contest of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall first waive in writing its right to any indemnity under this Section 8.3 with payment by Lessee in respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), claim (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at other than the rate that would have been payable by the relevant Taxing Authority with respect to a refund expenses of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxcontest).

Appears in 1 contract

Samples: Participation Agreement (Kansas City Southern)

Contest. (a) If a written claim is made against a any Tax Indemnitee for Taxes or with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunderany Taxes (other than Non-Indemnified Taxes), such Tax Indemnitee shall promptly give Owner notice notify Lessee. If reasonably requested by Lessee in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for within 30 days following the receipt of after such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day periodnotification, such Tax Indemnitee shall, in such notice upon receipt of indemnity satisfactory to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, including all reasonable costs, expenses and reasonable attorneys’ expenses, losses, legal and accountants' fees and disbursements, penalties and interest), in good faith contest (or, if permitted or to the extent permissible by applicable law, law allow Owner Lessee to contest) through appropriate administrative and judicial proceedings contest in Lessee's or such Tax Indemnitee's name the validity, applicability or amount of such Taxes by either (Ii) resisting payment thereofthereof if practicable and permitted by Applicable Law, (II) not paying the same except under protest if protest is necessary and proper or (IIIii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If requested to do so by Ownerproceedings, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated contest of any such claim by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such any Tax Indemnitee, such Tax Indemnitee shall permit Owner apprize Lessee of all material developments with respect to control such contest, shall forward copies of all material submissions made in such contest and shall materially comply in good faith with any reasonable request concerning the conduct of any such proceeding contest; provided, that no Tax Indemnitee will be obliged to take any such action: (a) that such Tax Indemnitee considers, in its reasonable discretion, may prejudice it; or (b) that such Tax Indemnitee reasonably considers does not have a reasonable prospect of success; or (c) for which Lessee has not made adequate provision to the reasonable satisfaction of such Tax Indemnitee in respect of the expense concerned; or (d) that gives rise to any material likelihood of the Aircraft or any interest of any Tax Indemnitee in the Aircraft being sold, forfeited or otherwise lost, or of criminal liability on the part of any Tax Indemnitee. If any Tax Indemnitee, in accordance with the foregoing, determines to pay such Taxes and shall provide to Owner (at Owner’s cost and expense) with seek a refund, Lessee will either pay such information or data that is in Taxes on such Tax Indemnitee’s control 's behalf and pay such Tax Indemnitee any amount due with respect to such payment or possession that is reasonably necessary to conduct will promptly reimburse such contestTax Indemnitee for such Taxes. In the case If any Tax Indemnitee shall obtain a refund of a contest controlled all or any part of such Taxes paid by a Tax IndemniteeLessee, such Tax Indemnitee shall consult with Owner in good faith regarding pay Lessee the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress amount of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (refund; provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law payable before such time as Lessee shall have made all payments or indemnities to any Tax Indemnitee then due with respect to Taxes and fact that demonstrate that Owner so long as no Default has no liability for the contested amounts hereunderoccurred and is continuing. Notwithstanding the foregoing, if If in addition to such refund any Tax Indemnitee shall releasereceive an amount representing interest, waiveattorneys fees or any other amount with respect to such refund, Lessee shall be paid that proportion of such interest, attorneys fees or any other amount which is fairly attributable to the Taxes paid by Lessee prior to the receipt of such refund. No Tax Indemnitee shall enter into a settlement or other compromise with respect to, or settle otherwise concede, any claim which may be indemnifiable by Owner a taxing authority on account of Taxes being contested by Lessee pursuant to this Section 8.3 5.13 without the written permission consent of OwnerLessee, Owner’s obligation to indemnify which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified by Lessee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee but not with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxany future claims). (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Airfund International Limited Partnership)

Contest. (a) If a written claim is shall be made against a Tax any ------- Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a any Tax Indemnitee makes a determination that a Tax is due in excess of $10,000 for which Owner could have an indemnity obligation hereunderLessee would be obligated to indemnify pursuant to this Article VII, such Tax Indemnitee shall promptly give Owner notify Lessee after such Indemnitee becomes aware of such action and in any event within 30 days after receipt by such Indemnitee of a written claim (but failure to notify Lessee within such 30-day period shall not impair such Indemnitee's right to indemnification under this Article VII except to the extent that Lessee's rights to contest such claim shall have been materially impaired by such failure) and shall, to the extent permitted by applicable law, not pay the claim before the earlier of (i) 30 days after giving Lessee notice and (ii) receipt of Lessee's response. If Lessee shall so request within the period referred to in writing the foregoing sentence, such Indemnitee shall, at Lessee's expense reimbursed to such Indemnitee on an After-Tax Basis, contest the imposition, validity or applicability of such Tax. The ultimate control over the conduct of such contest (including the right to forgo any and all administrative appeals, proceedings, hearings and conferences in respect of such claim and the right to select the forum for such contest and determine whether any such contest shall be by (i) resisting payment of such Tax, (ii) paying such Tax under protest or (iii) paying such Tax and seeking a refund thereof) shall remain with such Indemnitee; provided, however, that failure such Indemnitee shall keep --------- -------- Lessee or its counsel reasonably informed as to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require the progress thereof, consult with Lessee within a contest of such claim) and shall take no reasonable period before any significant action with respect thereto is taken or omitted and consider in good faith any suggestions made by Lessee or its counsel; provided further that unless (a) remedies under ---------------- Section 16 of the Lease shall have been, or are being, exercised in connection with an Event of Default which has occurred and is continuing or (b) a Bankruptcy Default or Payment Default has occurred and is continuing, and subject to Indemnitee's waiver rights described in Section 7.04(b) hereof, and provided that all conditions set forth in this Section 7.04 for the continuation of a contest shall then be satisfied, no such claim proceedings or litigation shall be settled or otherwise compromised without the prior written consent of Owner for 30 days following Lessee. If such Indemnitee so elects, such contest shall be conducted by Lessee in the receipt name of such notice by Owner; provided, that, Indemnitee (subject to the preceding proviso) and in the case of a claim made against a Tax Indemnitee, if no event shall such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall or Lessee be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right permitted to contest or to continue to contest, as the case may be, the imposition of any Tax for which Lessee is obligated to indemnify pursuant to this Article VII unless (BA) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep pay such information confidential other than to the extent necessary Indemnitee on demand and shall have paid as so demanded all reasonable costs and expenses that such Indemnitee may incur in order to contest the claim) furnish Owner connection with copies of any requests for information from any Taxing Authority relating to contesting such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner claim (including, without limitation, all reasonable costs, expenses expenses, losses, reasonable legal and reasonable attorneys’ and accountants’ accounting fees and disbursements)) on an After-Tax Basis, (B) Owner Participant shall have determined in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiturea Lien on, sale or of sale, forfeiture or loss of the Aircraft any Transponder or any part thereof or any interest therein (unless Owner except if Lessee shall have made provisions provision to protect the interests of any Owner Participant in a manner satisfactory to Owner Participant), (C) if such Tax contest shall be conducted in a manner requiring the payment of the claim, Lessee shall have advanced on an interest-free basis an amount equal to the amount of such claim which such Indemnitee shall have elected to pay and Lessee shall have indemnified the Indemnitee in a manner reasonably satisfactory to the Indemnitee, for any adverse tax consequences from the receipt, or interest-free nature, of such advance and (D) an Event of Default, Payment Default or Bankruptcy Default shall not have occurred and be continuing unless Lessee has posted adequate security securing payment of the Tax subject to the contest and expenses of the contest in a manner reasonably acceptable to such Indemnitee. (b) (An Indemnitee may at any time elect to settle or compromise any proposed claim or contest or decline to take any action or any further action with respect to a proposed claim or contest; provided, however, that if Lessee --------- -------- has properly requested such Tax action pursuant to this Article VII and has satisfied all conditions set forth in Section 7.04(a) for the continuation of a contest, such Indemnitee agrees shall notify Lessee that it waives its right to notify Owner any indemnity payment by Lessee that would otherwise be payable by Lessee pursuant to this Article VII in writing promptly after it becomes aware respect of such claim. An election by an Indemnitee to settle or compromise any proposed claim or contest or decline to take any action or take any further action with respect to a proposed claim or contest for any given taxable period shall not affect the rights and obligations of any other Indemnitee with respect to such riskproposed claim. An election by an Indemnitee to settle or compromise any proposed claim or contest or decline to take any action with respect to a proposed claim or contest (under circumstances where Lessee shall have properly requested action and satisfied all conditions for the continuation of a contest set forth in Section 7.04(a)) shall not affect the rights and obligations of such Indemnitee and Lessee hereunder in respect of any other taxable period or any other taxing authority except to the extent such election not to contest materially impairs as a legal or practical matter the ability of Lessee or an Indemnitee to contest any Tax with respect to such other 77 taxable period or such other taxing authority for which such Indemnitee is indemnified pursuant to this Article VII. Upon any such election by an Indemnitee, if Lessee shall have advanced an amount to an Indemnitee pursuant to clause (C) of Section 7.04(a), such Indemnitee shall repay the advance to Lessee, plus interest on such advance from the date of the making of such advance by Lessee to the day next preceding the day of repayment of such advance by such Indemnitee calculated at the applicable rate of the tax authority with respect to the claim to which the advance related; such repayment shall be made upon the occurrence of the earlier of (ivx) no Lease final adjudication of such contest (including a settlement thereof) and (y) such time as such Indemnitee shall elect to discontinue the contest as above provided; provided, however, -------- ------- notwithstanding the foregoing, such Indemnitee shall not be obligated to make any repayment to Lessee pursuant to this sentence for so long as an Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to but shall promptly make such Tax Indemnitee before proceeding or continuing with such contest, the amount payment once all Events of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner Default shall have acknowledged its liability for such claim hereunder, provided that Owner shall not no longer be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxcontinuing. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Magellan International Inc)

Contest. If the Internal Revenue Service makes a claim against Landlord which, if successful, would require Tenant to make a Tax Indemnification Payment, Landlord agrees to contest the claim on request of Tenant subject to the following conditions: (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall Landlord agrees promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure after becoming aware thereof to notify effectively forecloses Owner’s rights to require a contest Tenant of any such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, . Tenant agrees that, in the case of a event it desires the claim made against a Tax Indemniteeto be contested, if such Tax Indemnitee it shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order request Landlord to contest the claimclaim within thirty (30) furnish Owner with copies days after such notice from Landlord. Landlord agrees not to make any payment of any requests for information from any Taxing Authority relating to such Taxes with respect to tax which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at is the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent subject of the Owner claim before it gives the notice and during the thirty (except as contemplated by Section 8.3.4(b30) or (c))day period after it gives the notice. (b) Notwithstanding Landlord shall consult with Tenant regarding the commencement and prosecution of any and all administrative proceedings with the Internal Revenue Service in contesting the claim. Landlord reserves the right to decline to pursue administrative proceedings. If administrative proceedings are not pursued or are not successful, Landlord shall, at the request of Tenant, contest the claim by either paying the tax claimed and suing for a refund in the appropriate court or contesting the claim in the United States Tax Court and, if necessary, bring appropriate appeals. (c) Prior to taking any such action and prior to each appeal from any adverse determination, Landlord shall have received from Tenant an opinion of outside tax counsel of recognized standing, which counsel is reasonably acceptable to Landlord, to the effect that on the basis of law and fact a meritorious defense exists to such claim or that there is a meritorious basis for such refund claim, identifying such defense or basis, as the case may be. Subject to the foregoing, in no event shall will Landlord compromise or settle the claim or cease to contest the claim without the written consent of Tenant (provided, however, that Landlord may so compromise, settle or cease to contest if it waives in writing its right to an indemnity for any Loss resulting from such claim). Tenant agrees to reimburse Landlord for all reasonable costs incurred by Landlord as a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed result of contesting the claim and to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee which Landlord may incur in connection with contesting such Taxes, includingthe claim. These costs and expenses shall include, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements. If Tenant elects to pay the tax claimed and sue xxx a refund, Tenant shall provide Landlord with sufficient funds (iias an interest free loan) if to pay the tax. (d) If any such claim referred to above shall be made by the Internal Revenue Service and Tenant shall have requested Landlord to contest such claim and otherwise has complied with its obligations under this sub-part, Tenant's liability for indemnification hereunder shall involve become fixed upon final determination of the liability of Landlord. At such time, Tenant shall become obligated for the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits indemnification hereunder resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claimcontest. If Tenant has provided funds to Landlord (as an interest free loan) shall terminate, subject to Section 8.3.4(c), pay the tax pursuant to the foregoing paragraph) and subject Landlord subsequently receives a refund of tax in connection with such final determination (or would have received a refund had any payment made from funds provided by Tenant not been applied in payment of a tax liability determined to Section 8.3.4(cbe owing by Landlord for which Tenant is not required to make a Tax Indemnification Payment), such Tax Indemnitee shall repay to Owner any refund or an amount previously paid or advanced equal to such Tax Indemnitee amount so applied, together with respect to such claim, plus any interest at the rate that also received (or which would have been payable received) by the relevant Taxing Authority with respect Landlord and fairly attributable to a such refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3tax or amount so applied, a Tax Indemnitee will not be required paid over to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim)Tenant, (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition extent of such TaxTenant's payment to Landlord.

Appears in 1 contract

Samples: Assignment and Assumption Agreement (Maxwell Technologies Inc)

Contest. (a) If a written claim is made against a Tax an Indemnitee for Taxes with respect to which Owner could be Mortgagor is liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Mortgagor prompt notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Mortgagor with copies of any requests for information from any Taxing Authority taxing authority relating to such Taxes with respect to which Owner Mortgagor may be required to indemnify hereunder, but a failure to give such notice or to furnish such requests shall not diminish Mortgagor's obligations hereunder except to the extent such failure precludes Mortgagor from exercising its contest rights hereunder. If The Indemnitee shall in good faith, and at Mortgagor's expense, if timely requested by Owner in writing within 30 days after its receipt by Mortgagor, contest in the name of such notice, such Tax the Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by by: (Ii) resisting payment thereof, thereof if practical; (IIii) not paying the same except under protest if protest is necessary and proper or proper; (IIIiii) if the payment is be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings; or (iv) taking such other action as is reasonably requested by Mortgagor from time to time. If requested to do so by OwnerNotwithstanding the foregoing provisions of this Section 8.2(f), the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax such Indemnitee shall not be required to pursue take, and shall not be required to permit Mortgagor to take, any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated action to the transactions contemplated by the Operative Agreements without, in the good faith judgment of contest any such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (iA) Owner Mortgagor shall have agreed to pay such Tax Indemnitee on demand and shall pay all reasonable out-of-pocket costs and expenses incurred by which such Tax Indemnitee may incur in connection with contesting such Taxes, including, without limitation, all reasonable out (B) no payment Event of pocket costs Default shall have occurred and expenses and reasonable attorneys’ and accountants’ fees and disbursementsbe continuing unless Mortgagor shall have posted a satisfactory bond with respect to such claim or provided other security therefor reasonably satisfactory to such Indemnitee, (iiC) if such in the event of a contest shall involve by or in the payment name of an Indemnitee or in the event of a judicial contest, upon written request of the Indemnitee Mortgagor shall provide to such Indemnitee within 30 days after such request an Officers' Certificate to the effect that a reasonable basis exists for contesting such claim, Owner shall advance the amount thereof (to the extent indemnified hereunderD) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to commencing any judicial action, Mortgagor acknowledges its liability hereunder on the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee contested amount, and (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iiiE) such Tax Indemnitee it shall have been reasonably determined that the action to be taken will not (i) result in any the material risk danger of forfeiturea sale, sale forfeiture or loss of the Aircraft or Airframe (unless Owner except if Mortgagor shall have adequately bonded any Lien that results in such material danger or otherwise made provisions to protect the interests of any such Tax Indemnitee in a manner adequate provision reasonably satisfactory to such Tax Indemnitee to protect the interest of such Indemnitee) or (provided, that ii) subject such Tax Indemnitee agrees to notify Owner any material risk of criminal prosecution. To the extent not inconsistent with the provisions contained elsewhere in writing promptly after it becomes aware of any such riskthis Section 8.2(f), (iv) no Lease Event of Default the Indemnitee shall have occurred and be continuing unless Owner has provided security for its obligations control over the conduct of a contest of a claim hereunder (except to the extent that a contest is being conducted by advancing to such Tax Indemnitee before proceeding or continuing Mortgagor in accordance with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunderprovisions hereof). Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Mortgagor pursuant to the foregoing provisions of this Section 8.3 8.2 without the express written permission of OwnerMortgagor, Owner’s Mortgagor's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject terminate to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything extent. Nothing contained in this Section 8.38.2 shall require any Indemnitee to contest, or require any Indemnitee to permit Mortgagor to contest, a Tax claim which such Indemnitee will not would otherwise be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect 8.2(f), if such Indemnitee shall waive its rights to such Tax, plus interest at the rate that any indemnity payment by Mortgagor which would have been otherwise be payable by the relevant Taxing Authority with Mortgagor pursuant to this Section 8.2 in respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxclaim.

Appears in 1 contract

Samples: Indenture (Trans World Airlines Inc /New/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Lessee could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (provided, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by OwnerLessee; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sue for a refund prior to the end of such 30-day period rxxxnd if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that that, in its good faith opinion, is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable lawlaw to be contested by the Lessee in its own name, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any contest such proceeding matter in its own name, if permitted by applicable law, and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contestcontest (other than such Tax Indemnitee's federal income tax returns), and Lessee shall keep such Tax Indemnitee reasonably informed concerning the progress of such contest and shall provide such Tax Indemnitee with copies of all submissions and judicial and administrative proceedings. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 9.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner Lessee (except as contemplated by Section 8.3.4(b9.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Lessee to pursue any contest) unless unless (i) Owner Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner Lessee shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free and after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Lessee any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner Lessee shall have made provisions to protect the interests of any such Tax Indemnitee and the Owner Participant in a manner reasonably satisfactory to such Tax IndemniteeIndemnitee and the Owner Participant) (provided, that such Tax Indemnitee agrees to notify Owner Lessee in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner Lessee has provided adequate security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by OwnerLessee, Owner Lessee shall have acknowledged its liability for such claim hereunder, provided that Owner Lessee shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner Lessee has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessee pursuant to this Section 8.3 9.3 without the written permission of OwnerLessee, Owner’s Lessee's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c9.3.4(c), and subject to Section 8.3.4(c9.3.4(c), such Tax Indemnitee shall repay to Owner Lessee any amount previously paid or advanced to such Tax Indemnitee with respect to such claimclaim (other then contest costs), plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.39.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s Lessee's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 9.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner Lessee any amount previously paid or advanced by Owner Lessee pursuant to this Section 8.3 9.3 (other than contest costs) with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner Lessee the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If any Indemnitee receives a written claim is made against from any taxing authority for any Indemnified Tax (a Tax Claim”), such Indemnitee for Taxes shall give Lessee written notice of such Tax Claim within fifteen (15) Business Days after such Indemnitee receives such Tax Claim. (b) If reasonably requested by Lessee in a written notice delivered to such Indemnitee within thirty (30) days after the date on which such Indemnitee gives the notice required by Section 21.7(a) with respect to which Owner could a Tax Claim, and if the conditions described in Section 21.7(c) are satisfied and continue to be liable satisfied at all times during the contest, such Indemnitee shall contest such Tax Claim (or, at the option of such Indemnitee, may permit Lessee to contest such Tax Claim in the name of Lessee or in the name of such Indemnitee), in each case at Lessee’s expense, in accordance with applicable Law, and in a manner determined and controlled by the party that is conducting such contest (for example, by contesting the validity, applicability or amount of the Indemnified Taxes that are the subject of such Tax Claim by resisting payment or indemnity hereunderof such Indemnified Taxes, or by paying such Indemnified Taxes under protest if protest is necessary and proper, or by paying such Indemnified Taxes and using reasonable efforts to obtain a Tax refund thereof), and such Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, shall not settle or compromise such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action Claim or refrain from taking any allowable appeal from any adverse administrative or judicial determination with respect to such claim Tax Claim without the prior written consent of Owner for 30 days following the receipt of Lessee (which consent shall not be unreasonably withheld), provided that such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice have the right to contest refuse to begin or continue (Bor to permit Lessee to begin or continue) the failure contest of any or all of the Indemnified Taxes that are the subject of such Tax Claim if such Indemnitee (x) waives in writing its right under this Article 21 to so pay would result in criminal penalties be indemnified for the Indemnified Taxes which such Indemnitee declines to contest and (iiy) repays to Lessee the amount (if any) which Lessee previously advanced to such Indemnitee in accordance with Section 21.7(c)(iv) with respect to the Indemnified Taxes that such Indemnitee declines to contest. Any request by Lessee to contest a Tax Claim pursuant to this Section 21.7 shall constitute an acknowledgment and agreement by Lessee that the Taxes which are the subject of such Tax Claim are Indemnified Taxes and that Lessee shall pay on demand and on an After-Tax Basis all costs and expenses paid or incurred by such Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt conduct of such notice, such Tax Indemnitee shall, at the expense of Owner contest (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements). 65 ARTICLE 21 TAXES; TAX INDEMNITY (c) An Indemnitee shall have no obligation to begin or continue (or to permit Lessee to begin or continue) to contest any Tax Claim pursuant to this Section 21.7 unless all of the following conditions are satisfied at the time such contest is to be commenced and at all times during the contest: (i) no Event of Default (or Default consisting of an occurrence of any event described in Section 23(a), (m), or (n) hereof which has not yet become an Event of Default) shall have occurred and be continuing; (ii) contesting such Tax Claim would not, in good faith the opinion of Lessor, result in any material reputational risk for any Indemnitee, any risk of criminal or civil penalty, or any reasonable possibility of any sale, forfeiture, confiscation, seizure or loss of, or the imposition of a Lien (other than a Lien for the Tax that is the subject of such contest provided that enforcement of such Lien is stayed until the final determination of such contest and Lessee maintains adequate reserves with respect to such Lien in accordance with International Accounting Principles) on any Item of Equipment or any interest therein; (iii) the amount of the Indemnified Tax that is the subject of such Tax Claim exceeds ***** (or its equivalent in any other currency) or, if permitted by applicable lawthe Indemnified Tax that is the subject of such Tax Claim is a recurring Tax, allow Owner to contestthe sum of (A) through appropriate administrative and judicial proceedings the validity, applicability or amount of the Indemnified Tax that is the subject of such Tax Claim plus (B) the aggregate amount of the Indemnified Taxes that would be required to be paid in all subsequent years during the remainder of the Term if the Tax Claim is not contested exceeds ***** (or its equivalent in any other currency); (iv) if such Indemnitee decides to contest such Tax Claim by (I) resisting payment thereof, (II) not paying the same except under protest if protest Indemnified Tax that is necessary the subject of such Tax Claim and proper or (III) if the payment is made, using reasonable efforts taking action to obtain a refund thereof thereof, Lessee shall have made an interest-free advance to such Indemnitee in an appropriate administrative and/or judicial proceeding. If requested amount equal to do so by Owner, the amount of the Indemnified Tax and shall have delivered to such Indemnitee shall appeal a written undertaking to indemnify such Indemnitee and its Affiliates for any adverse administrative Tax consequences to such Indemnitee or judicial decisionany of its Affiliates resulting from such interest-free advance; (v) Lessee shall be paying, except that the on demand and on an After-Tax Basis, all costs and expenses paid or incurred by such Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control connection with the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements); (vi) If requested by such Indemnitee, Lessee shall have delivered to such Indemnitee, at Lessee’s expense, a written opinion of independent tax counsel selected by such Indemnitee and reasonably acceptable to Lessee and having expertise with respect to the Tax that is the subject of the Tax Claim to the effect that it is more likely than not that the requested contest of such Tax Claim will be successful; and (vii) if the sum of the Indemnified Taxes that are the subject of such Tax Claim exceeds *****, Lessee shall have delivered to such Indemnitee (or, if required by applicable Law, to the court in which the proceeding contesting such Tax Claim is to be conducted) a letter of credit, surety bond or other collateral in form, substance and amount satisfactory to such Indemnitee, in its ***** Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission. 66 ARTICLE 21 TAXES; TAX INDEMNITY sole discretion (exercised reasonably and in good faith), to secure the obligations of Lessee under this Article 21 with respect to the Indemnified Taxes that are the subject of such Tax Claim unless Lessee shall have paid, or shall have advanced pursuant to Section 21.7(c)(iv) funds to pay, such Tax Claim. (d) If and to the extent that an Indemnitee determines in good faith (i) that it has actually realized a reduction in its current liability for an Excluded Tax (a “Tax Saving”), as a result of any deduction, Tax credit or other Tax benefit for any Indemnified Tax which Lessee has paid to the appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, or (ii) if that it has actually received a refund (in cash or as an offset against any liability of such contest shall involve Indemnitee for an Excluded Tax) (a “Refund”) of any Indemnified Tax paid by Lessee to the payment appropriate taxing authority or for which Lessee has paid an indemnity to such Indemnitee pursuant to Section 21.1, then provided that such Indemnitee may do so without adversely affecting its right to retain such Tax Saving or Refund and provided that no Event of Default (or Default consisting of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement occurrence of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such paymentevent described in Section 23(a), (iiim), or (n) hereof which has not yet become an Event of Default) has occurred and is continuing, such Indemnitee shall pay to Lessee an amount equal to the sum of: (1) the lesser of (x) the amount of such Tax Saving or Refund (as the case may be) minus the net amount of all Taxes payable by such Indemnitee shall have reasonably determined that with respect to the action to be taken will not result in any material risk receipt or accrual of forfeituresuch Refund or Tax Saving, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemniteey) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Indemnified Tax being contestedor indemnity payment previously paid by Lessee with respect to such Indemnified Tax, plus any plus (2) the amount of interest and penalties and an amount estimated in good faith (if any) received by such Tax Indemnitee for expenses, and (v) prior on such Refund minus the net amount of all Taxes payable by such Indemnitee with respect to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for the receipt or accrual of such claim hereunderinterest, provided that Owner such Indemnitee shall not thereby be bound by its acknowledgment in a less favorable position than it would have been in if the Final Determination articulates conclusions Indemnified Tax had not been paid or incurred. A written statement of law such Indemnitee as to the availability and/or amount of such Tax Saving or Refund and fact interest shall be final and conclusive, except for any manifest error. (e) Each Indemnitee shall provide as soon as reasonably practicable after receipt of Lessee’s written request therefor, any information or documents that demonstrate that Owner has no liability for are reasonably requested by Lessee and are in the contested amounts hereunder. Notwithstanding the foregoing, if possession or reasonable control of such Indemnitee and which are necessary to enable Lessee to contest any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without 21.7, provided, however, that no Indemnitee shall have any obligation to make available, disclose or deliver to Lessee or any other Person (i) any return, report, declaration, opinion or other document or information relating solely to one or more Excluded Taxes or (ii) in the written permission case of Ownerany return, Owner’s obligation report, declaration or other document or information that relates to one or more Excluded Taxes and to one or more Indemnified Taxes, the portion of such return, report, declaration, opinion or other document or information that relates to Excluded Taxes. (f) Any additional Tax that is imposed on an Indemnitee as a result of the disallowance, loss, unavailability, recapture, or reduction of any Tax Saving or Refund for which any Indemnitee made a payment to Lessee pursuant to Section 21.7(d) shall be treated as an Indemnified Tax for which Lessee is required to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject pursuant to Section 8.3.4(c)21.1, and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect regard to the imposition exclusions in Section 21.1(b) and without regard to the contest provisions of such Tax.Sections 21.7(a) and 21.7(b). 67 ARTICLE 21 TAXES; TAX INDEMNITY

Appears in 1 contract

Samples: Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Lessee could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (provided, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s Lessee's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by OwnerLessee; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sue for a refund refxxx prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding and shall provide to Owner Lessee (at Owner’s Lessee's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Lessee in good faith regarding the manner of contesting such claim and shall keep Owner Lessee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 9.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner Lessee (except as contemplated by Section 8.3.4(b9.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Lessee to pursue any contest) unless unless (i) Owner Lessee shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner Lessee shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Lessee any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner Lessee shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner Lessee in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner Lessee has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by OwnerLessee, Owner Lessee shall have acknowledged its liability for such claim hereunder, provided that Owner Lessee shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner Lessee has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessee pursuant to this Section 8.3 9.3 without the written permission of OwnerLessee, Owner’s Lessee's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c9.3.4(c), and subject to Section 8.3.4(c9.3.4(c), such Tax Indemnitee shall repay to Owner Lessee any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.39.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s Lessee's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 9.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner Lessee any amount previously paid or advanced by Owner Lessee pursuant to this Section 8.3 9.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner Lessee the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made against a any Tax Indemnitee for Taxes or with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunderany Taxes (other than Non- Indemnified Taxes), such Tax Indemnitee shall promptly give Owner notice notify Lessee. If reasonably requested by Lessee in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for within 30 days following the receipt of after such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day periodnotification, such Tax Indemnitee shall, in such notice upon receipt of indemnity satisfactory to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, including all reasonable costs, expenses and reasonable attorneys’ expenses, losses, legal and accountants’ fees and disbursements, penalties and interest), in good faith contest (or, if permitted or to the extent permissible by applicable law, law allow Owner Lessee to contest) through appropriate administrative and judicial proceedings contest in Lessee’s or such Tax Indemnitee’s name the validity, applicability or amount of such Taxes by either (Ii) resisting payment thereofthereof if practicable and permitted by Applicable Law, (II) not paying the same except under protest if protest is necessary and proper or (IIIii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If requested to do so by Ownerproceedings, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated contest of any such claim by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such any Tax Indemnitee, such Tax Indemnitee shall permit Owner apprise Lessee of all material developments with respect to control such contest, shall forward copies of all material submissions made in such contest and shall materially comply in good faith with any reasonable request concerning the conduct of any such proceeding contest; provided, that no Tax Indemnitee will be obliged to take any such action: (a) that such Tax Indemnitee considers, in its reasonable discretion, may prejudice it; or (b) that such Tax Indemnitee reasonably considers does not have a reasonable prospect of success; or (c) for which Lessee has not made adequate provision to the reasonable satisfaction of such Tax Indemnitee in respect of the expense concerned; or (d) that gives rise to any reasonable likelihood of the Aircraft or any interest of any Tax Indemnitee in the Aircraft being sold, forfeited or otherwise lost, or of criminal liability on the part of any Tax Indemnitee. If any Tax Indemnitee, in accordance with the foregoing, determines to pay such Taxes and shall provide to Owner (at Owner’s cost and expense) with seek a refund, Lessee will either pay such information or data that is in Taxes on such Tax Indemnitee’s control behalf and pay such Tax Indemnitee any amount due with respect to such payment or possession that is reasonably necessary to conduct will promptly reimburse such contestTax Indemnitee for such Taxes. In the case If any Tax Indemnitee shall obtain a refund of a contest controlled all or any part of such Taxes paid by a Tax IndemniteeLessee, such Tax Indemnitee shall consult with Owner in good faith regarding pay Lessee the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress amount of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (refund; provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law payable before such time as Lessee shall have made all payments or indemnities to any Tax Indemnitee then due with respect to Taxes and fact that demonstrate that Owner so long as no Default has no liability for the contested amounts hereunderoccurred and is continuing. Notwithstanding the foregoing, if If in addition to such refund any Tax Indemnitee shall releasereceive an amount representing interest, waiveattorneys fees or any other amount with respect to such refund, Lessee shall be paid that proportion of such interest, attorneys fees or any other amount which is fairly attributable to the Taxes paid by Lessee prior to the receipt of such refund. No Tax Indemnitee shall enter into a settlement or other compromise with respect to, or settle otherwise concede, any claim which may be indemnifiable by Owner a taxing authority on account of Taxes being contested by Lessee pursuant to this Section 8.3 5.13 without the written permission consent of OwnerLessee, Owner’s obligation to indemnify which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified by Lessee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee but not with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxany future claims). (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Global Crossing Airlines Group Inc.)

Contest. (a) If Xxxxxx receives a written claim is made against a for an indemnity pursuant to Section 7A of the Participation Agreement or pursuant to the Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due Indemnity Agreement for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax Lessee would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunderpay Lessor an indemnity pursuant to this Article 8A, Lessor shall promptly notify Lessee thereof in writing. If requested by Owner in writing within 30 days after its receipt Lessee by written notice received by Lessor at least four Business Days before the latest date on which Lessor may request or initiate a contest pursuant to Section 7A(g) of such notice, such Tax Indemnitee shall, at the expense Participation Agreement or Section 4 of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee Indemnity Agreement, Lessor shall appeal any adverse administrative exercise its rights under Section 7A(g) of the Participation Agreement or judicial decision, except that under Section 4 of the Tax Indemnitee shall not be required to pursue any appeals to Indemnity Agreement, as the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutcase may be, in the good faith judgment of such Tax Indemniteemanner requested by Xxxxxx, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data provided that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee Lessor be required to pursue any contest initiate or continue (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior request any other Person to the commencement of such initiate or continue) a contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) claim unless: (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iva) no Lease Major Default or Event of Default shall have occurred and be continuing unless Owner has Lessee shall have provided security for reasonably satisfactory to Lessor securing Lessee's performance of its obligations hereunder by advancing under this Article 8A; (b) Lessee shall have agreed to pay on an After-Tax Basis all reasonable costs and expenses that Lessor incurs in connection with contesting such claim and all amounts that Lessor is required to pay from time to time pursuant to Section 7A(g) (iv) (B) of the Participation Agreement or Section 4(d) of the Tax Indemnity Agreement, as the case may be; (c) the action to be taken will not result in a material danger of sale, forfeiture or loss of the Aircraft or any part thereof or any interest therein or the creation of a Lien (other than a Permitted Lien) on the Aircraft, the Trust Estate or the Trust Indenture Estate unless Lessee shall have adequately bonded or otherwise made provision to protect the interests of Lessor and the Owner Participant in a manner reasonably satisfactory to Lessor and the Owner Participant; (d) if such contest shall require payment of the Tax claimed, Lessee shall have advanced on an interest-free basis the amount thereof (including any interest, penalties and additions to tax with respect thereto) for the period during which such contest is continuing and shall have agreed to indemnify such Lessor and (in the case of a contest pursuant to Section 4 of the Tax Indemnity Agreement) the Owner Participant or (in the case of a contest pursuant to Section 7A of the Participation Agreement) each Head Lease Tax Indemnitee before proceeding for any adverse tax consequences of such interest-free loan; (e) Lessee shall have acknowledged its obligation to indemnify Lessor should the contested claim prove to be correct except to the extent that the Final Determination demonstrates that Lessee would not be so obligated absent such acknowledgment; (f) in the case of a Tax Indemnitee Controlled Contest pursuant to Section 7A(g) of the Participation Agreement or continuing with any contest pursuant to Section 4 of the Tax Indemnity Agreement, Lessor and the relevant Head Lease Tax Indemnitee shall have received, at Xxxxxx's expense, a written opinion of independent tax counsel selected by Xxxxxx and reasonably acceptable to Lessor and such Head Lease Tax Indemnitee to the effect that there is a Reasonable Basis for such contest; (g) in the case of a Tax Indemnitee Controlled Contest pursuant to Section 7A of the Participation Agreement, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith indemnity that would be payable by such Tax Indemnitee for expenses, and (v) prior Lessor pursuant to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for Section 7A if such claim hereunder, provided is not contested or if a contest of such claim is unsuccessful (plus the aggregate amount of the indemnities that Owner shall not would be bound payable by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner Lessor pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee 7A if all related claims that have been or could be raised with respect to any other period are not contested) would exceed $ 10,000; and (h) in the case of a contest pursuant to Section 4 of the Tax Indemnity Agreement, the amount of the indemnity that would be payable by Lessor pursuant to the Tax Indemnity Agreement if such claim is not contested or if a contest of such claim is unsuccessful (and plus the aggregate amount of the indemnities that would be payable by Lessor pursuant to the Tax Indemnity Agreement if all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid that have been or advanced to such Tax Indemnitee could be raised with respect to such claim, plus interest at the rate that any other period are not contested) would have been payable by the relevant Taxing Authority with respect to a refund of such Taxexceed $ 50,000. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Lease Agreement (Midway Airlines Corp)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations PARTICIPATION AGREEMENT 2013-1 hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s 's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Hawaiian Holdings Inc)

Contest. (a) If Sublessor receives a written claim is made against a for an indemnity pursuant to the Tax Indemnitee Indemnity Agreement for Taxes with respect which Sublessee would be required to which Owner could be liable for payment or pay Sublessor an indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee Sublessor shall promptly give Owner notice notify Sublessee thereof in writing of such claim (provided, but it being understood and agreed that failure of Sublessor to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in provide such notice to Owner, so inform Owner, and such Tax Indemnitee Sublessee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially adversely affect or otherwise prejudice the any Sublessor’s right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contestan indemnity hereunder). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner Sublessee in writing within 30 days after ten (10) Business Days before the latest day on which Sublessor may request a contest pursuant to Section 6 of the Tax Indemnity Agreement, Sublessor shall exercise its receipt rights, if any, under Section 6 of the Tax Indemnity Agreement provided that in no event shall Sublessor be required to initiate or continue (or be required to request any other person to initiate or continue) a contest unless: (i) the amount of the obligation on the part of Sublessee to indemnify Sublessor pursuant to subsection (1) hereof shall be at least $***, (ii) Sublessee agrees to reimburse Sublessor on demand (and complies with such notice, such Tax Indemnitee shall, at agreement) for all of the expense of Owner Participant’s and Sublessor’s reasonable costs and expenses (including, without limitation, all reasonable costs, expenses legal and reasonable attorneys’ and accountants’ accounting fees and disbursements)) which each may incur in contesting such disallowance, in good faith (iii) if Owner Participant elects to contest the disallowance by paying the tax claimed (orincluding interest, if permitted by applicable lawpenalties or additions to tax) and seeking a refund, allow Owner Sublessee shall advance to contest) through appropriate administrative and judicial proceedings Sublessor on an interest free basis the validity, applicability or aggregate amount of taxes, interest, penalties and additions to the tax applicable to such Taxes by (I) resisting payment thereofdisallowance and agree to indemnify Sublessor and the Owner Participant for any adverse tax consequences resulting from such advance, (IIiv) such contest would not paying entail any risk of criminal penalties, (v) with respect to such disallowance, Sublessee shall have furnished Sublessor at Sublessee’s expense, with a written opinion of independent tax counsel selected by Sublessor that a Reasonable Basis exists to contest such disallowance and prior to filing any appeal an opinion that a successful outcome on appeal is more likely than not and have posted a bond or other security for such appeal, (vi) no Default or Event of Default, under any of the same except under protest if protest Operative Documents by Sublessor or the Airline Services Agreement, has occurred and is necessary continuing, and proper or (IIIvii) if Sublessee shall have delivered to Sublessor a written acknowledge of Sublessee’s obligation to indemnify in full Sublessor pursuant to this Agreement to the payment extent that the contest is made, using reasonable efforts not successful. Sublessor shall have no obligation to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested cause Owner Participant and Owner Participant shall have no obligation to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals decision of an appellate court to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Airline Services Agreement (Mair Holdings Inc)

Contest. (a1) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Borrower could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination determines that a Tax is due for which Owner Borrower could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice notify Borrower in writing of such claim (provided, that failure so to so notify Owner Borrower shall not relieve Owner Borrower of its indemnity obligations hereunder unless except to the extent that such failure to notify effectively forecloses Ownerhas a material adverse effect on Borrower’s indemnification obligations hereunder or on Borrower’s rights to require a successfully contest of such claim) ), and shall take no action with respect to such claim without the Borrower’s prior written consent of Owner for 30 days following the Borrower’s receipt of such notice by Ownernotice; provided, that, in the case of a claim made against a Tax Indemnitee, if applicable Law requires such Tax Indemnitee shall be required by law to take action prior to before the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerBorrower, so inform OwnerBorrower, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest)avoid taking action. In addition, such Such Tax Indemnitee shall (provided, provided that Owner Borrower shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim, such agreement to be delivered to the Tax Indemnitee and in form and substance reasonably acceptable to it) furnish Owner Borrower with copies of the relevant portions of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Borrower may be required to indemnify hereunder. If requested by Owner Borrower in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the Borrower’s expense of Owner (including, without limitation, including all reasonable costsout-of-pocket costs and expenses, expenses and including reasonable attorneys’ and accountants’ fees and disbursementsdisbursements incurred in connection with, and reasonably allocable to, the contest of such Tax), in good faith contest (or, if permitted by applicable lawLaw, allow Owner Borrower to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by (Ix) resisting payment thereof, (IIy) not paying the same Taxes except under protest if protest is necessary and proper proper, or (IIIz) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or or judicial proceeding. If requested to do so by OwnerBorrower in writing, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent that the Tax Indemnitee is able able, using reasonable efforts, to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, Transactions without (in the good faith judgment of such Tax Indemnitee, ’s good faith judgment) adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Borrower to control the conduct of any such proceeding and shall provide to Owner Borrower (at OwnerBorrower’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is and reasonably necessary to conduct such contest. In If the case of a contest is being controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner Borrower in good faith regarding the manner of contesting such claim claim, and shall keep Owner Borrower reasonably informed regarding the progress of such contest. If the contest is being controlled by Borrower, Borrower shall consult with the applicable Tax Indemnitee in good faith regarding the manner of contesting such claim, and shall keep such Tax Indemnitee reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 9.3(e) (including, without limitation, including any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the Borrower’s prior written consent of the Owner (except as contemplated by Section 8.3.4(bSections 9.3(e)(2) or (c3)). (b2) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner Borrower to pursue any contest) unless unless (i1) Owner shall have agreed Borrower agrees to pay such Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses incurred by that such Tax Indemnitee incurs in connection with contesting such Taxes, including, without limitation, including all reasonable out of out-of-pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, in each case, to the extent reasonably allocable to the contest of such Taxes), (ii2) if such contest shall involve involves the payment of the claim, Owner shall advance Borrower advances the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to before commencing the commencement of such contest on an interest-free after-Tax tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Borrower any net realized tax benefits resulting from such advance advance, including any tax benefits resulting from making such payment), (iii3) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale sale, or loss of, or the creation of a Lien (other than a Permitted Lien) on, the Aircraft or the Collateral (unless Owner shall have made Borrower makes provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) or any material risk of criminal liability or material civil liability (provided, that such Tax Indemnitee agrees to shall notify Owner Borrower in writing promptly after it becomes aware of any such riskrisks), (iv4) no Lease Event of Default shall have occurred and be continuing exists (unless Owner Borrower has provided security reasonably acceptable to the Tax Indemnitee for its obligations hereunder by advancing or has advanced to such Tax Indemnitee Indemnitee, before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, ) and (v5) prior to before commencing any judicial action controlled by OwnerBorrower, Owner such Tax Indemnitee shall have acknowledged its liability for received written confirmation from Borrower that the Taxes that are the subject of such Tax claim are indemnified by Borrower hereunder, provided provided, that Owner Borrower shall not be bound by its acknowledgment if such confirmation to the extent that the Final Determination of the contest articulates conclusions of law and fact that demonstrate that Owner has no liability Borrower is not liable hereunder for the contested amounts hereunderTaxes that are the subject of such Tax claim. . Notwithstanding the foregoing, if any Tax Indemnitee shall releasereleases, waivewaives, compromise compromises, or settle settles any claim which that may be indemnifiable by Owner Borrower pursuant to this Section 8.3 9.3 without the Borrower’s written permission of Ownerpermission, OwnerBorrower’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly directly-related claims claims, and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner Borrower any amount previously paid or advanced to such Tax Indemnitee with respect to such claimclaim (other than previously incurred costs and expenses of contest described in clause (1) of this paragraph), plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax. (c3) Notwithstanding anything contained in this Section 8.39.3, a Tax Indemnitee will not be required to contest the imposition of any Tax Tax, and shall be permitted to settle or compromise any claim without OwnerBorrower’s consent consent, if such Tax Indemnitee (i1) shall waive waives its right to indemnity under this Section 8.3 9.3 with respect to such Tax (and any directly directly-related claim claim, and any claim the outcome of which is determined based upon the outcome of such claim), (ii2) shall pay pays to Owner Borrower any amount previously paid or advanced by Owner Borrower pursuant to this Section 8.3 9.3 with respect to such TaxTax (other than previously incurred costs and expenses of contest described in clause (1) of this paragraph), plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to on a refund of such Tax, and (iii3) shall agree agrees to discuss with Owner Borrower the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Loan Agreement (Airtran Holdings Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx sxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or and shall not settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminateterminate and, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Southwest Airlines Co)

Contest. (a) If a written claim is made against a Tax an Indemnitee for any Taxes with respect to which Owner could be liable for payment or indemnity hereunderindemnified against in this Section 10, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee Lessor shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunderLessee. If requested by Owner Lessee in writing within 30 days after its receipt of such noticewriting, such Tax the Indemnitee shall, at upon receipt of an indemnity satisfactory to such Indemnitee for the expense expenses of Owner contest (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ expenses, legal and accountants' fees and disbursements), penalties and interest) and for any liability or loss which such Indemnitee may incur as a result of its contesting any Tax., in good faith contest in the name of such Indemnitee (oror if the contest with respect to such Taxes concerns an aspect of such Taxes that is applicable to the possession, if maintenance, situs, lease or use of aircraft and such Taxes are not generally applicable to the properties or assets (other than aircraft and engines) owned or leased by such Indemnitee or any members of its consolidated group for United States Federal income tax purposes, such Indemnitee shall, to the extent permitted by applicable law, allow Owner permit Lessee to contestcontest in the name of such Indemnitee) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (Ii) resisting payment thereof, thereof if practicable in the Indemnitee's sole discretion. (IIii) not paying the same except under protest protest, if protest is necessary and proper or proper, and (IIIiii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings. If requested to do so by Owner, the Tax an Indemnitee shall appeal obtain a refund of all or any adverse administrative or judicial decisionpart of such Taxes paid by Lessee, except such Indemnitee shall pay Lessee the amount of such refund; provided that the Tax Indemnitee such amount shall not be required payable before such time as Lessee shall have made all payments of indemnities to pursue any appeals such Indemnitee then due under this Section 10. If in addition to such refund an Indemnitee 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 the United States Supreme Court. If and Taxes paid by Lessee prior to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment receipt of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee refund. Lessee shall permit Owner not be deemed to control be in default under any of the conduct of any such proceeding and above indemnification provisions so long as it or Lessor shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct diligently prosecute such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail any report or return is required to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination be made with respect to any claim) or settle or compromise any claim without the prior written consent obligation of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity Lessee under this Section 8.3 with respect to 10 or arising out of this Section 10, Lessee will either make such Tax (report or return in such manner as will show the interest of the Indemnitee in each Item of Equipment, and any directly related claim and any claim the outcome of which is determined based upon the outcome send a copy of such claim), (ii) shall pay report or return to Owner any amount previously paid Lessor and such Indemnitee or advanced by Owner pursuant to this Section 8.3 with respect to will notify Lessor and such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund Indemnitee of such Tax, requirement and (iii) make such report or return in such manner as shall agree be satisfactory to discuss with Owner Lessor and such Indemnitee. In the views or positions event of a contest of any relevant Taxing Authority with respect to the imposition Taxes hereunder, whichever of such Tax.the

Appears in 1 contract

Samples: Lease Agreement (Airlease LTD)

Contest. (a) If a written claim is made against a and received by any Tax Indemnitee for Taxes with respect any Tax for which Lessee may be required to which Owner could be liable for indemnify such Tax Indemnitee or make a payment or indemnity hereunderunder this Schedule 6 (including a written notice of such proceeding), or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall notify Lessee promptly give Owner notice in writing of such claim (providedincluding with such notice a copy of such claim), that but the failure to so notify Owner shall not relieve Owner affect any obligation of its indemnity obligations Lessee under this Schedule 6 provided that nothing contained herein shall prevent Lessee from making a claim for any damages it suffers with respect to an obligation to indemnify such Tax Indemnitee hereunder unless solely as a result of such failure to notify effectively forecloses Owner’s rights to require a contest of by such claim) and Tax Indemnitee. The Tax Indemnitee shall not take no any action with respect to such claim or Tax without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by Owner; providedLessee, provided that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law Law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(AA)(I) the failure to so pay the Tax would result in substantial any civil penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (BII) the failure to so pay would result in criminal penalties and (iiB) such Tax Indemnitee shall take any action so required act in connection with so paying the Tax in a the manner that is in its reasonable good faith opinion the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall at Lessee’s expense (provided, provided that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of the relevant portions of any requests for information from any Taxing Authority Government Entity relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such noticewriting, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith shall contest (or, if permitted by applicable law, allow Owner Lessee to contest, to the extent provided in the next paragraph) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes claim by (Iv) resisting payment thereof, (IIw) not paying the same except under protest if protest is necessary and proper or proper, (IIIx) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal (y) appealing any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the highest court in South Africa or the United States Supreme Court. If Court and/or (z) taking such other reasonable action as is reasonably requested by Lessee from time to time, provided that (1) Lessee shall reimburse such Tax Indemnitee on demand for all reasonable expenses incurred by such Tax Indemnitee for the purpose of conducting such contest, including, without limitation, any attorney, accountant’s or advisory fees, (2) before the commencement of any administrative or judicial action, Lessee shall acknowledge its obligation in writing to indemnify such Tax Indemnitee for the amount of Tax in controversy if the contest is unsuccessful, provided that Lessee shall not be bound by its acknowledgment of liability if the contest is resolved on the basis of a written decision of the adjudicator that clearly and unambiguously indicates that the basis for the resolution is such that the Lessee has no liability under this Schedule 6 with respect to such Tax, (3) Lessee provides and pays for an opinion of independent tax counsel mutually acceptable to Lessee and such Tax Indemnitee that there is a reasonable basis for the contest, (4) there is no material risk of forfeiture of the Aircraft as a result of such contest, and (5) if such contest involves paying the Tax claimed and claiming a refund thereof, Lessee (A) shall have advanced to such Tax Indemnitee the amount of such Tax (to the extent indemnified hereunder) on an interest-free basis and (B) shall have agreed to indemnify such Tax Indemnitee for any adverse tax consequences of such interest-free loan (in the case of clauses (A) and (B), determining such amount after taking into account any Tax Savings or other reduction in Taxes referred to in the penultimate paragraph of Section 5 of this Schedule 6 resulting from any imputed interest deduction arising from such interest free advance from Lessee). If (i) in the case of an indemnified Tax other than an income or similar Tax the Tax Indemnitee is able to separate (at the cost and expense of Lessee) the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements Documents without, in the sole good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any such proceeding (a “Lessee-Controlled Contest”) without foregoing its right to participate and shall (at the cost and expense of Lessee) provide to Owner (at Owner’s cost and expense) with Lessee such information or and data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled and that is not considered by a Tax Indemnitee, such Tax Indemnitee in ggod faith to be proprietary or confidential. The Tax Indemnitee and Lessee shall consult with Owner each other and each other’s counsel in good faith regarding the manner of contesting such any claim hereunder and shall keep Owner each other reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take Notwithstanding any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise compromise, or settle any claim (which the Tax Indemnitee shall be free to do) which may be indemnifiable by Owner Lessee pursuant to this Section 8.3 Schedule 6 without the written permission of OwnerLessee, OwnerLessee’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall promptly repay to Owner Lessee any amount previously paid or advanced to such Tax Indemnitee with respect to such claimclaim (other than amounts described in clause (1) of the second preceding paragraph to the extent previously incurred). In addition, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, if a Tax Indemnitee will not be required to receives an award of attorney’s fees in a contest for which Lessee has paid an allocable portion of expenses, the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right promptly pay to indemnity Lessee that portion of the award paid by Lessee that relates to the issues contested under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such TaxSchedule 6.

Appears in 1 contract

Samples: Lease Agreement (Aircastle LTD)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve in- volve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s 's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Atlas Air Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee or Lessee for any Taxes with respect for which Lessee is obligated to which Owner could be liable for payment or indemnity hereundera Tax Indemnitee, or if notice is received by a Tax Indemnitee makes or Lessee from a determination Government Entity that such a Tax claim is due for which Owner could have an indemnity obligation hereundergoing to made, such Tax Indemnitee shall notify Lessee, or Lessee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to as the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner case may be required to indemnify hereunderbe. If requested by Owner Lessee in writing within 30 thirty (30) days after its such notification, the Tax Indemnitee agrees, upon receipt of such notice, such Tax Indemnitee shall, indemnity satisfactory to it and at the expense of Owner Lessee (including, including without limitation, all reasonable costs, expenses expenses, losses, legal and reasonable attorneys’ and accountants’ accounting fees and disbursements), penalties and interest) in good faith to contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes in the forum selected by such Tax Indemnitee by (IA) resisting payment thereofthereof if practicable, (II) not paying the same except under protest if protest is necessary and proper or (IIIB) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If requested to do so by Ownerproceedings; provided, the however, no Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 to contest a claim unless (including1) Lessee provides the Tax Indemnitee, without limitationtogether with such written request, any action regarding any appeal with an opinion of an adverse determination with respect independent tax counsel reasonably satisfactory to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required both as to pursue any contest (or counsel and substance, to permit Owner to pursue any the effect that there is a meritorious basis for such contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii2) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material the risk of forfeiturean imposition of criminal penalties or, sale in Lessor’s reasonable judgment, any risk of any sale, forfeiture or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of Aircraft, any such Tax Indemnitee Engine or any Part, or any interest in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk)thereof, (iv3) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing continuing, (4) if Lessee determines reasonably to pay such Tax and seek a refund, Lessee has advanced the amount of such Tax to make such payment, (5) the amount of the Taxes at issue exceeds US$5,000, and (6) Lessee shall have provided ALA MSN 2830 – Global Crossing Airlines the Tax Indemnitee before proceeding or continuing with a written acknowledgment of liability if and to the extent that the contest is not successful. Upon written request of Lessee and provided that the Tax Indemnitee determines in good faith that no Tax Indemnitee will be adversely affected by Lessee’s conduct of such contest, the amount Tax Indemnitee shall allow Lessee to prosecute such tax contest in the name of the Tax being contestedIndemnitee (or if possible in the name of Lessee) by granting an appropriate power of attorney or other authorization and such other action as is reasonably necessary, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expensesor, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions upon written request of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c)Lessee, such Tax Indemnitee shall repay consult with Lessee, keep Lessee informed regarding the tax contest and consider in good faith the recommendations of Lessee as to Owner any amount previously paid or advanced to such the prosecution of the tax contest. If the Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to shall obtain a refund of all or any part of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Taxes for which Lessee has paid an indemnity hereunder or advanced funds to the Tax Indemnitee will not be required as described above, the Tax Indemnitee shall pay Lessee the amount of such refund, after deducting all out-of-pocket costs and expenses that were incurred by Lessor or Tax Indemnitee in connection therewith. If in addition to contest such refund an amount representing expenses, attorney’s fees or interest on the imposition amount of any Tax and such refund is received, Lessee shall be permitted paid such expenses, attorney’s fees and that proportion of such interest which is fairly attributable to settle or compromise any claim without Owner’s consent if taxes, fees and other charges paid by Lessee prior to the receipt of such Tax Indemnitee (i) refund; provided, however, that no amount shall waive its right to indemnity be payable under this Section 8.3 with respect to such Tax (and or the preceding sentence during any directly related claim and any claim the outcome of period in which a Default is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxcontinuing.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Global Crossing Airlines Group Inc.)

Contest. (a) If a written claim is made against a Tax Indemnitee Ford shall furnish UDOT by the due date thereof evidence of the payment of all Impositions. Ford may, without postponement of payment, bring proceedings for Taxes with respect to which Owner could be liable for payment contesting the validity or indemnity hereunderamount of any Imposition, or to recover payments therefor, and Ford agrees to indemnify and save UDOT and XXXX’s mortgagee (the “Mortgagee”), if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunderany, such Tax Indemnitee harmless from all losses, costs, damages, liabilities, expenses (including without limitation reasonable attorneys’ fees, court costs and related expenses) incurred by UDOT or Mortgagee in connection therewith. UDOT shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action reasonably cooperate with Ford with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; providedproceedings, thatbut all costs, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, fees and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required expenses incurred in connection with so paying such proceedings shall be borne by Ford. Ford will give UDOT and, if requested, Mortgagee, written advance notice of Ford’s intention to make any such contest. If applicable law requires the Tax in a manner that is the least prejudicial to the pursuit postponement of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary payment of an Imposition in order to contest the claim) furnish Owner validity or amount thereof, if UDOT and Mortgagee agree in writing to permit such postponement of payment, and if Ford posts with copies UDOT reasonable security to assure the payment of such Imposition upon the earliest to occur of demand for payment by the Mortgagee, the commencement of any requests enforcement proceedings for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt the collection of such noticeImposition or the completion or discontinuation of such contest, then Ford may postpone the payment of such Tax Indemnitee shall, at Imposition during the expense period of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith Ford’s diligent prosecution of the proceedings to contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability validity or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunderImposition. Notwithstanding the foregoing, if any Tax Indemnitee shall releasethe rights of Mortgagee, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained as set forth in this Section 8.3shall apply and be operative only if the Mortgagee has exercised any right it may have to receive payments of Base Rent, a Tax Indemnitee will not be required to contest and the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome Mortgagee has given Ford written notice of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxfact.

Appears in 1 contract

Samples: Sublease Agreement (Universal Logistics Holdings, Inc.)

Contest. (a) If In the event that an Indemnitee receives a written notice of a claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for which, if sustained, would require the payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have of an indemnity obligation hereunderby Lessee pursuant to this Section 10, such Tax Indemnitee shall promptly give Owner notice in writing notify Lessee of such claim (providedand, that failure to so notify Owner if requested by Lessee, shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a in good faith contest of such claim) and or shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice permit Lessee, if desired by Owner; provided, thatLessee and, in the case of a claim made against a Tax Indemniteecontest involving Owner Participant, if such Tax Indemnitee shall be required permitted by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform OwnerOwner Participant, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall contest may be entitled to pay conducted in whole or in part separately in the Tax claimed and xxx for a refund prior to the end name of Lessee without involving Taxes of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would Indemnitee not materially prejudice the right indemnified hereunder, to contest or in the name (Bi) the failure to so pay would result in criminal penalties no Event of Default has occurred and is continuing, (ii) such Tax a threshold amount of $75,000 for any individual claim and $150,000 for recurring claims is at issue, (iii) Lessee shall have (a) furnished Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial written opinion of tax counsel selected by Indemnitee and reasonably acceptable to Lessee to the pursuit of effect that a reasonable basis (as defined in ABA Opinion 85- 352) exists for the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse initial administrative or judicial decision, except contest and that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able more likely than not to separate the contested issue or issues from other issues arising prevail in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). a trial court decision, and (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand for all reasonable costs and expenses incurred by such Tax which Indemnitee may incur in connection with contesting such Taxes, including, without limitation, all reasonable out claim, (iv) there is no substantial risk of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, forfeiture of the Aircraft, (iiv) if such contest shall involve is to be initiated by the payment of, and the claiming of the claima refund for, Owner such Taxes, Lessee shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required or cause to be paid prior advanced to such Indemnitee (if such Indemnitee is the commencement of such contest Indenture Trustee or the Trust Indenture Estate) sufficient funds (on an interest-free after-Tax basis basis) to make such Tax payments and shall have agreed to indemnify such Indemnitee against any adverse tax consequences of such advance, (and such Tax Indemnitee vi) no claim shall promptly pay be appealed to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment)U.S. Supreme Court, and (iiivii) such Tax Indemnitee Lessee shall have reasonably determined that the action admitted its liability to indemnify Owner Participant should a proposed adjustment prove to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereundercorrect, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which such admission may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission conditioned on a binding judicial or administrative adjudication of Owner, Owner’s obligation Lessee's responsibility to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c)Owner Participant, and subject provided further that in no event will such adjudication cause Lessee to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Taxdelay in fulfilling its contest obligations. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Aircraft Lease Agreement (America West Airlines Inc)

Contest. (a) If a written claim is made against a Tax an Indemnitee or Lessee for Taxes with respect to which Owner could be liable for payment or indemnity hereunderany taxes, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunderfees and other charges, such Tax Indemnitee or Lessee, as the case may be, shall promptly give Owner notice in writing within thirty (30) days after receipt of such claim (providednotify the other, that but the failure to so notify Owner shall not relieve Owner of its indemnity affect Lessee’s obligations hereunder unless under this Article 8.4 except to the extent such failure to notify actually or effectively forecloses Ownerprecludes Lessee’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 thirty (30) days after its such notification, Lessor shall or shall cause such Indemnitee, upon receipt of such notice, such Tax Indemnitee shall, indemnity satisfactory to it and at the expense of Owner Lessee (including, including without limitation, all reasonable costs, expenses expenses, losses, legal and reasonable attorneys’ and accountants’ accounting fees and disbursements), penalties and interest) in good faith to contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes taxes, fees and other charges in the forum selected by such Indemnitee by: (Ii) resisting payment thereof, thereof if practicable; or (II) not paying the same except under protest if protest is necessary and proper or (IIIii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If requested to do so by Ownerproceedings; provided, that if an Indemnitee controls such contest, Lessee may participate in such contest at its own expense; the Tax Indemnitee shall appeal on request inform Lessee of all material developments in the contest; the Indemnitee shall consult with Lessee regarding all material issues of the contest and shall in reasonable good faith attempt to implement all reasonable advice of Lessee regarding the resolution of the contest; and the Indemnitee (unless required by law) shall not settle any adverse administrative contest or judicial decisionmake any payments regarding such contest without the consent of Lessee, except provided that the Tax Indemnitee such consent shall not be unreasonably withheld by Lessee); provided, however, Lessor shall not be required to pursue take or to cause any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any contest a claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)).unless: (bA) Notwithstanding the foregoingLessee provides Lessor, in no event shall a Tax Indemnitee be required together with such written request, with an opinion of independent tax counsel satisfactory to pursue any contest (or Lessor both as to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs counsel and expenses incurred by such Tax Indemnitee in connection with contesting such Taxessubstance, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto effect that are required to be paid prior to the commencement of there is a meritorious basis for such contest on an interest-free after-Tax basis to such Tax Indemnitee contest; (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iiiB) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material the risk of forfeiturean imposition of criminal penalties or, sale in Lessor’s reasonable judgment, any risk of any sale, forfeiture or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of, or creation of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) Lien on any Equipment, or any interest therein; (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivC) no Lease Event or Event of Default shall have occurred and be continuing unless Owner continuing; (D) if such Indemnitee shall pay such tax and seek a refund, Lessee has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, advanced the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior tax to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim advance; (E) the amount of the taxes at issue exceeds $25,000 (or the equivalent in any other currency); and all directly related claims *** Material has been omitted pursuant to a request for confidential treatment and claims based on filed separately with the outcome of SEC (F) Lessee shall have provided such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund written acknowledgment of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax liability if and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxextent that the contest is not successful.

Appears in 1 contract

Samples: Lease Agreement (Hawaiian Holdings Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for any Taxes with respect referred to which Owner could be liable for payment or indemnity hereunderin this Section 16, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (providednotify Lessee, provided that a failure to so notify Owner shall not relieve Owner the Lessee of its indemnity obligations hereunder obligation under this Section 16 unless such failure to notify it actually or effectively forecloses Owner’s rights to require precludes or materially adversely impacts a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If reasonably requested by Owner Lessee in writing within 30 days after its such notification, Tax Indemnitee shall upon receipt of such notice, such Tax Indemnitee shall, an indemnity satisfactory to it and at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ expenses, losses, legal and accountants' fees and disbursements), penalties and interest) in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by either (Ii) resisting payment thereofthereof if practicable, (II) not paying the same except under protest if protest is necessary and proper or (IIIii) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If requested to do so by Ownerproceedings; provided, the Tax Indemnitee shall appeal any adverse administrative or judicial decisionhowever, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 to contest a claim unless (includinga) Lessee provides with such written request an opinion of independent counsel, without limitationsatisfactory both as to counsel and substance, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). effect that there is a meritorious basis for such contest, (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any a material risk of forfeiturea sale, sale forfeiture or loss of, or creation of the Aircraft a Lien (unless Owner shall have made provisions to protect the interests other than a Permitted Lien) on, any Item of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk)Equipment, (ivc) the Lessee acknowledges its liability under this Section 16 for any Taxes being contested, and (d) no Lease Event of Default shall have occurred and or be continuing unless Owner has provided security for its obligations hereunder by advancing to such continuing. If Tax Indemnitee before proceeding or continuing with determines to pay such contestTaxes and seek a refund, the amount of the Lessee will either pay such Taxes on Tax being contested, plus any interest Indemnitee's behalf and penalties and an amount estimated in good faith by such pay Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee amount due with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject payment pursuant to Section 8.3.4(c), and subject to Section 8.3.4(c), such 16.2 hereof or will promptly reimburse Tax Indemnitee shall repay to Owner any amount previously paid or advanced to for such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner Taxes pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, Sections 16.1 and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax16.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Vanguard Airlines Inc \De\)

Contest. If the Internal Revenue Services makes a claim against Landlord which, if successful, would require Tenant to make a Tax Indemnification Payment, Landlord agrees to contest the claim on request of Tenant subject to the following conditions: (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall Landlord agrees promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure after becoming aware thereof to notify effectively forecloses Owner’s rights to require a contest Tenant of any such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, . Tenant agrees that, in the case of a event it desires the claim made against a Tax Indemniteeto be contested, if such Tax Indemnitee it shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order request Landlord to contest the claimclaim within thirty (30) furnish Owner with copies days after such notice from Landlord. Landlord agrees not to make any payment of any requests for information from any Taxing Authority relating to such Taxes with respect to tax which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at is the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent subject of the Owner claim before it gives the notice and during the thirty (except as contemplated by Section 8.3.4(b30) or (c))day period after it gives the notice. (b) Notwithstanding Landlord shall consult with Tenant regarding the commencement and prosecution of any and all administrative proceedings with the Internal Revenue Service in contesting the claim. Landlord reserves the right to decline to pursue administrative proceedings. If administrative proceedings are not pursued or are not successful, Landlord shall, at the request of Tenant, contest the claim by either paying the tax claimed and suing for a refund in the appropriate court or contesting the claim in the United States Tax Court and, if necessary, bring the appropriate appeals. (c) Prior to taking any such action and prior to each appeal from any adverse determination, Landlord shall have received from Tenant an opinion of outside tax counsel of recognized standing, which counsel is reasonably acceptable to Landlord, to the effect that on the basis of law and fact a meritorious defense exists to such claim or that there is a meritorious basis for such refund claim, identifying such defense or basis, as the case may be. Subject to the foregoing, in no event shall will Landlord compromise or settle the claim or cease to contest the claim without the written consent of Tenant (provided, however, that Landlord may so compromise, settle or cease to contest if it waives in writing its right to an indemnity for any Loss resulting from such claim). Tenant agrees to reimburse Landlord for all reasonable costs incurred by Landlord as a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed result of contesting the claim and to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee which Landlord may incur in connection with contesting such Taxes, includingthe claim. These costs and expenses shall include, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements. If Tenant elects to pay the tax claimed and xxx for a refund, Tenant shall provide Landlord with sufficient funds (iias an interest free loan to pay the tax). (d) if If any such claim referred to above shall be made by the Internal Revenue Service and Tenant shall have requested Landlord to contest such claim and otherwise has complied with its obligations under this sub-part, Tenant's liability for indemnification hereunder shall involve become fixed upon final determination of the liability of Landlord. At such time, Tenant shall become obligated for the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits indemnification hereunder resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claimcontest. If Tenant has provided funds to Landlord (as an interest free loan) shall terminate, subject to Section 8.3.4(c), pay the tax (pursuant tho the foregoing paragraph) and subject Landlord subsequently receives a refund of tax in connection with such final determination (or would have received a refund had any payment made from funds provided by Tenant not been applied in payment of a tax liability determined to Section 8.3.4(cbe owing by Landlord for which Tenant is not required to make a Tax Indemnification Payment), such Tax Indemnitee shall repay to Owner any refund or an amount previously paid or advanced equal to such Tax Indemnitee amount so applied, together with respect to such claim, plus any interest at the rate that also received (or which would have been payable received ) by the relevant Taxing Authority with respect Landlord and fairly attributable to a such refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3tax or amount so applied, a Tax Indemnitee will not be required paid over to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim)Tenant, (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition extent of such TaxTenant's payment to Landlord.

Appears in 1 contract

Samples: Facility Lease (Primex Technologies Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s 's rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s 's cost and expense) with such information or data that is in such Tax Indemnitee’s 's control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys' and accountants' fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s 's obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s 's consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

Appears in 1 contract

Samples: Participation Agreement (Continental Airlines Inc /De/)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could Lessee may be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such the Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (after its receipt and shall furnish Lessee with copies of the claim and all other writings received from the taxing authority relating to the claim; provided, however, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations any obligation to indemnify the Tax Indemnitee hereunder unless such failure shall effectively preclude Lessee’s ability to notify effectively forecloses Owner’s rights to require a initiate or continue the contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such . The Tax Indemnitee shall be not pay such claim prior to 30 days after providing Lessee with such written notice, unless required to do so by law to take action prior or unless deferral of payment would cause adverse consequences to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Indemnitee. The Tax Indemnitee shall take no action for as long as it is legally able to do so in good faith, with due diligence and at Lessee’s expense, if requested in writing by Lessee, contest (it being understood that a including pursuing all appeals) in the name of the Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted requested by applicable Lessee and permissible as a matter of law, allow Owner in the name of Lessee), or shall at Lessee’s option permit Lessee to contest) through appropriate administrative and judicial proceedings contest in either the name of Lessee or with the Tax Indemnitee’s consent, which consent shall not be unreasonably withheld, in the name of the Tax Indemnitee, the validity, applicability or amount of such Taxes by by, (Ii) resisting payment thereof, thereof if practical; (IIii) not paying the same except under protest if protest is necessary and proper or proper; (IIIiii) if the payment is be made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceedingproceedings; or (iv) taking such other reasonable action as is reasonably requested by Lessee from time to time. If requested to do so by OwnerNotwithstanding the foregoing provisions of this paragraph (h), the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals contest, or permit Lessee to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements withoutcontest, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (iA) Owner Lessee shall have agreed in writing to pay such on an After-Tax Basis to the Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses incurred by such which the Tax Indemnitee may incur in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursementsclaim, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (ivB) no Lease Event of Default shall have occurred and be continuing continuing, (C) such contest will not result in any material danger of the sale, forfeiture or loss of any of the Units unless Owner has Lessee shall have provided security reasonably acceptable to the Tax Indemnitee, and there is no risk of imposition of any criminal penalties as a result of such Tax Claim, (D) if such contest involves payment of such Tax, Lessee will either lend to the Tax Indemnitee on an interest-free basis (without reduction for its obligations hereunder any Tax savings that the Tax Indemnitee may realize as a result of the payment of such Tax), which loan will be repaid in full by advancing to the Tax Indemnitee upon the conclusion of the contest or pay such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith payable by Lessee pursuant to Section 7.1(a) above with respect to such Tax Indemnitee for expensesTax, and (vE) prior to commencing any judicial action controlled by Ownerupon request of a Tax Indemnitee, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify Lessee furnishes such Tax Indemnitee with respect an opinion of Lessee’s counsel that there is a reasonable basis for the position to be asserted in such contest and in the case of an appeal, that there is a substantial likelihood that the adverse decision will be reversed or substantially modified on appeal. If a Tax Indemnitee is obligated to contest a claim under this paragraph (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(ch), such Tax Indemnitee shall repay not compromise or settle such claim without the express written permission of Lessee. If it does so in the absence of such permission, Lessee’s obligation to Owner any amount previously paid or advanced to such Tax Indemnitee indemnify with respect to such claimclaim shall terminate. If a Tax Indemnitee is obligated to contest a claim under this paragraph (h), plus interest such Tax Indemnitee may at the rate that would have been payable by the relevant Taxing Authority any time decline to take further action with respect to a refund the contest of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall first waive in writing its right to any indemnity under this Section 8.3 with payment by Lessee in respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), claim (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at other than the rate that would have been payable by the relevant Taxing Authority with respect to a refund expenses of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxcontest).

Appears in 1 contract

Samples: Participation Agreement (Kansas City Southern)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee Xxxxxx shall promptly give Owner notice notify the Company in writing of any claim made by the Internal Revenue Service that, if successful, would require the Company to pay a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after Xxxxxx knows of such claim (provided, that failure and shall apprise the Company of the nature of such claim and the date on which such claim is requested to so notify Owner be paid. Xxxxxx shall not relieve Owner pay such claim prior to the expiration of its indemnity obligations hereunder unless the thirty (30) day period following the date on which it gives such failure notice to notify effectively forecloses Owner’s rights to require a contest the Company (or such shorter period ending on the date that any payment of such claim) and shall take no action taxes with respect to such claim without is due). If the Company notifies Xxxxxx in writing prior written consent of Owner for 30 days following to the receipt expiration of such notice period that it desires to contest such claim, Xxxxxx shall: (i) give the Company any information reasonably requested by Ownerthe Company relating to such claim; (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company and reasonably acceptable to Xxxxxx; (iii) cooperate with the Company in good faith in order effectively to contest such claim; (iv) permit the Company to participate in any proceedings relating to such claim; provided, thathowever, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in the case of connection with such contest and shall indemnify and hold Xxxxxx harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end result of such 30-day periodrepresentation and payment of costs and expenses. Without limitation on the foregoing provisions of this paragraph (c), the Company shall control all proceedings taken in connection with such Tax Indemnitee shallcontest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such notice to Ownerclaim and may, so inform Ownerat its sole option, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled either direct Xxxxxx to pay the Tax tax, interest and penalties claimed and xxx for a refund prior or contest the claim in any permissible manner, and Xxxxxx agrees to the end of prosecute such 30-day period if (i)(A) the failure contest to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take a determination before any action so required in connection with so paying the Tax administrative tribunal, in a manner that is court of initial jurisdiction and in one or more appellate courts, as the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee Company shall (determine; provided, however, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts Company directs Xxxxxx to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting pay such claim and xxx for a refund, the Company shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (includingadvance, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contestbasis, the amount of the such payment to Xxxxxx together with any Excise Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee income taxes imposed with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject advance or with respect to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee imputed income with respect to such claim, plus interest at advance; and further provided that any extension of the rate that would have been payable by statute of limitations relating to payment of taxes for the relevant Taxing Authority taxable year of Xxxxxx with respect to a refund which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to the contest the imposition of any Tax and shall be permitted limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Xxxxxx shall be entitled to settle or compromise contest, as the case may be, any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable other issue raised by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views Internal Revenue Service or positions of any relevant Taxing Authority with respect to the imposition of such Taxother taxing authority.

Appears in 1 contract

Samples: Supplement to Chairman’s Agreement (TCF Financial Corp)

Contest. Borrower shall be entitled, at its expense, to require the ------- imposition of any Tax for which it is obligated to indemnify hereunder to be contested, and (aafter notice to the pertinent Indemnitee) to withhold payment of any Tax not theretofore paid by an Indemnitee, during pendency of such contest unless prior payment is a condition to such contest. At an Indemnitee's election, such contest shall be conducted by Borrower in Borrower's name, but only if Borrower is permitted as a matter of law so to contest such Tax. If a written any claim is made against a Tax or any proceeding is commenced against: any Indemnitee for Taxes with respect any Tax as to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have Borrower has an indemnity obligation hereunderpursuant to this Section 9.02, such Tax Indemnitee shall promptly give Owner notice in writing notify Borrower of any such claim (providedor proceeding, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) but the failure to so pay the Tax would result in substantial penalties provide such notice shall not release Borrower from its indemnity obligation hereunder (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than except to the extent necessary that Borrower's contest of that claim is precluded by such failure). If an Indemnitee is requested by Borrower in order writing to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such noticean indemnifiable Tax, so long as no Financial Default exists, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), shall in good faith faith, with due diligence, and at Borrower's expense, contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability applicability, or amount of such Taxes by Tax by, in such Indemnitee's sole discretion (Ibut after consulting with Borrower), (a) resisting payment thereof, (IIb) not paying the same except under protest protest, if protest is necessary and proper proper, or (IIIc) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or and judicial proceeding. If requested to do so by Ownerproceedings; provided, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue take any appeals action pursuant to this sentence unless and until (aa) Borrower provides to that Indemnitee a written acknowledgment that Borrower is liable to indemnify such Indemnitee for the United States Supreme Court. If and contested Taxes to the extent that the Tax Indemnitee contest is able unsuccessful; (bb) Borrower provides to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated Indemnitee, upon request, an opinion of tax counsel, selected by Borrower and reasonably satisfactory to such Indemnitee, to the transactions contemplated by effect that such contest has a reasonable possibility of success under applicable law and the Operative Agreements withoutstandards of ABA Formal Opinion 85-352 (and, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct case of any appeal, that there is "substantial authority" (within the meaning of Code Section 6662) for such proceeding appeal: ; and shall provide to Owner (at Owner’s cost and expensecc) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner Borrower shall have agreed to pay such Tax Indemnitee (and shall actually pay) on demand to such Indemnitee all reasonable costs and expenses incurred by (including reasonable attorneys, fees) that such Tax Indemnitee may incur in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if claim. If any such contest shall involve the involves payment of the claimTax in question, Owner Borrower shall advance the amount thereof either (x) make such payment directly to the extent indemnified hereunderappropriate authority, or (y) plus interest, penalties and additions furnish to tax with respect thereto that are required to be paid prior to the commencement of such contest Indemnitee sufficient funds (on an interest-free after-Tax basis basis) to make such payment, and indemnify such Indemnitee, in a manner satisfactory to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner Indemnitee, against any net realized adverse tax benefits consequence resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax interest-free advance. An Indemnitee shall have reasonably determined not settle any contest required by this Section 9.02 without Borrower's prior written consent, unless (1) that the action Indemnitee foregoes its right to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security indemnified for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, or (2) Borrower unreasonably withholds or delays such consent. If any Indemnitee obtains a refund attributable to any Tax paid or indemnified by Borrower, such Indemnitee shall (if no Financial Default exists) pay to Borrower an amount equal to the amount of such refund, plus any interest received or credited and penalties attributable thereto, plus any net tax benefit (and an amount estimated in good faith minus any net tax detriment) realized (or sustained) by such Tax Indemnitee for expenses, as a result of any refund received and (v) prior to commencing any judicial action controlled payment by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner made pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any sentence. Such amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle payable not later than 30 days after such refund or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which interest is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Taxreceived.

Appears in 1 contract

Samples: Loan Agreement (Tower Air Inc)

Contest. (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner Lessee could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner Lessee notice in writing of such claim (provided, that failure to so notify Owner Lessee shall not relieve Owner Lessee of its indemnity obligations hereunder unless such failure to notify effectively forecloses OwnerLessee’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner Lessee for 30 days following the receipt of such notice by OwnerLessee; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to OwnerLessee, so inform OwnerLessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and xxx for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by OwnerLessee) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that that, in its good faith opinion, is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner Lessee with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner Lessee may be required to indemnify hereunder. If requested by Owner Lessee in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner Lessee (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable lawlaw to be contested by the Lessee in its own name, allow Owner Lessee to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by OwnerLessee, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner Lessee to control the conduct of any contest such proceeding matter in its own name, if permitted by applicable law, and shall provide to Owner Lessee (at OwnerLessee’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a (other than such Tax Indemnitee’s federal income tax returns), and Lessee shall keep such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding concerning the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 8.3.4(b) or (c)). (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax. (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.provide such

Appears in 1 contract

Samples: Participation Agreement (Continental Airlines Inc /De/)

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