Contests. Notwithstanding anything to the contrary herein contained, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if: (a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted; (b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender; (c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand); (d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.
Appears in 6 contracts
Samples: Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing (Adcare Health Systems Inc), Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing (Adcare Health Systems Inc), Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing (Adcare Health Systems Inc)
Contests. Notwithstanding anything If any claim or claims is or are made against any Indemnitee for any Tax which is subject to indemnification as provided in Section 7.2(a), such Indemnitee shall as soon as practicable, but in no event more than thirty (30) days after receipt of formal written notice of the Tax or proposed Tax, notify the Lessee and if, in the reasonable opinion of the Lessee there exists a reasonable basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and if the provisos of the definition of “Permitted Contest” continue to be satisfied), the Lessee at its expense may, to the contrary herein containedextent permitted by Applicable Law and provided that it has acknowledged in writing its liability for the Tax at issue if the contest is not successful, contest such Tax, and subsequently may appeal any adverse determination (other than to the United States Supreme Court), in the appropriate administrative and legal forums; provided, that in all other circumstances, upon notice from the Lessee to such Indemnitee that there exists a reasonable basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to the Lessee reasonably acceptable to the Indemnitee), the Mortgagor Indemnitee, at the Lessee’s expense, shall contest any such Tax (so long as the provisos of the definition of “Permitted Contest” continue to be satisfied and, in the case of a Tax on gross or net income, the aggregate amount of the Tax exceeds U.S. $100,000). Lessee shall pay all reasonable, out-of-pocket expenses actually incurred by the Indemnitee in contesting any such Tax (including, without limitation, all reasonable attorney’s and accountants’ fees), upon demand by the Indemnitee. Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that such participation by the Lessee does not interfere with the Indemnitee’s control of such contest and the Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitee shall have the right to participate in the conduct of any proceedings controlled by the Lessee to the extent that such participation by the Indemnitee does not interfere with the Lessee’s control of such contest, and the Indemnitee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim for which the Lessee would be required to make a reimbursement payment hereunder will not be settled or compromised without the Lessee’s prior written consent or the Indemnitee waives its right to indemnification hereunder and repays the Taxes advanced by the Lessee as a non-interest bearing loan by the Lessee to such Indemnitee without interest. Indemnitee shall endeavor to settle or compromise any such Contested Lien shall be determined adverse contested claim in accordance with written instructions received from the Lessee; provided, that (i) the Lessee on or before the date the Indemnitee executes a settlement or compromise pays the contested Tax to the Mortgagor, extent agreed upon or makes an indemnification payment to the Indemnitee in an amount acceptable to the Indemnitee; and (ii) forthwith upon demand by the Lender ifsettlement or compromise does not, in the reasonable opinion of the LenderIndemnitee materially adversely affect the right of the Lessor or such Indemnitee to receive Rent or the Lease Balance or any other payment pursuant to the Operative Documents, or involve a material risk of sale, forfeiture or loss of the affected Leased Property or any interest therein or any matter described in the provisos to the definition of “Permitted Contest.” The failure of an Indemnitee to contest timely a claim against it for any Tax which is subject to indemnification under Section 7.2(a) and for which it has an obligation to the Lessee to contest under this Section 7.2(b) in the manner required by Applicable Law where the Lessee has timely requested (with regard to the time of the initial notification by Indemnitee) that such Indemnitee contest such claim shall relieve the Lessee of its obligations to such Indemnitee under Section 7.2(a) with respect to such claim only to the extent such failure results in the loss of an effective contest. If Applicable Law requires the payment of a contested Tax as a condition to, or regardless of, its being contested, and notwithstanding the Lessee chooses to contest such Tax or to direct the Indemnitee to contest such Tax in accordance with this Section, then the Lessee shall provide the Indemnitee with the funds to pay such Tax, such provision of funds to be deemed a non-interest bearing loan by the Lessee to the Indemnitee to be repaid by any recovery of such Tax (including the amount of any interest received by reason of payment or deposit of the Tax claimed with funds advanced by the Lessee to the Indemnitee with respect to such recovered Tax, payable on a net after-tax basis to the Indemnitee) from such contest and any remaining unpaid amount not recovered to offset the Lessee’s obligation to indemnify the Indemnitee for such Tax. Lessee shall indemnify the Indemnitee on a Grossed-Up Basis in accordance with Section 7.4 for and against any adverse consequences of any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidinterest-free loan.
Appears in 6 contracts
Samples: Participation Agreement, Participation Agreement, Participation Agreement
Contests. Notwithstanding anything In respect of the indemnification provided under Section 7.1(a), promptly after receipt by an Indemnitee of notice of any pending or threatened Claim, such Indemnitee shall, if a claim for indemnification in respect thereof is to be made against the Lessee, give notice thereof to the contrary herein contained, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and Lessee. So long as no Contested Lien shall constitute an Event of Default under this Mortgageis continuing, ifthe Lessee, but only if:
at its own expense, may elect to assume the defense of any such Claim through its own counsel, which shall be subject to the reasonable approval of the Indemnitee, on behalf of the Indemnitee (awith full right of subrogation to the Indemnitee’s rights and defenses). Lessee must indicate its election to assume such defense by written notice to the Indemnitee within thirty (30) The Mortgagor shall forthwith give days following receipt of Indemnitee’s notice of any Contested Lien to the Lender at Claim, or in the case of a third- party claim which requires a shorter time for response then within such shorter period as specified in the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) Indemnitee’s notice of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contestClaim; provided that in lieu of such payment Indemnitee has given the Mortgagor may furnish Lessee notice thereof. If the Lessee denies liability or fails to respond to the Lender a bond notice within the time period set forth above, the Indemnitee may defend or title compromise the Claim as it deems appropriate without prejudice to any of Indemnitee’s rights hereunder. If the Lessee shall have elected to assume the defense of any such Claim, then upon the request of the Lessee, the Indemnitee requesting payment of indemnity in such amount and form, and issued by a bond under Section 7.1(a) shall promptly furnish the Lessee with copies of any records or title insuring company, as may be satisfactory documents pertaining to the Lender;
(c) The Mortgagor shall diligently prosecute matter to be indemnified and, to the contest extent known by such Indemnitee, a reasonably detailed explanation of the circumstances giving rise to the claim of indemnification and the determination of the amount of the requested indemnity payment. Upon payment in full to Indemnitee of any Contested Lien by appropriate legal proceedings having indemnity pursuant to Section 7.1(a), the effect Lessee shall be subrogated to any right of staying the foreclosure or forfeiture Indemnitee in respect of the Premisesmatter against which such indemnity has been paid. If the Lessee shall have elected to assume the defense of any such Claim, upon the written request at any time and shall permit from time to time of the Lender Lessee, Indemnitee shall, at the expense of the Lessee, take such reasonable actions and execute such documents as are necessary or reasonably appropriate to be represented assist the Lessee in the preservation and enforcement against third parties of the Lessee’s right of subrogation hereunder. The Indemnitee may employ separate counsel in any such contest Claim and shall pay all expenses incurredparticipate in the defense thereof, in so doing, including but the fees and expenses of the Lender’s such counsel (all of which shall constitute so much additional Indebtedness bearing interest be at the Default Rate until paid, expense of the Indemnitee unless the Indemnitee and payable upon demand);
(d) The Mortgagor the Lessee shall pay each have been advised by counsel that there exists an irresolvable conflict of interest in such Contested Lien counsel’s representation of the Indemnitee and all Lien Amounts together with interest the Lessee in which case the fees and penalties thereon (i) if and to the extent that any expenses of such Contested Lien separate counsel shall be determined adverse to for the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion account of the Lender, Lessee. All reasonable out-of-pocket fees and notwithstanding any such contestexpenses shall be paid periodically as incurred. So long as no Event of Default shall have occurred and be continuing, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but Lessee shall not be required liable for any settlement of any such Claim effected without its consent unless the Lessee shall fail to, pay or elect in writing not to, assume the defense thereof in which case the Indemnitee, without waiving any rights to indemnification hereunder, may defend such Claim and enter into any good faith settlement thereof without the prior written consent of the Lessee. Lessee shall not, without the prior written consent (not to be unreasonably withheld) of the Indemnitee, effect any settlement of any such Claim unless such settlement includes an unconditional release of the Indemnitee from all liabilities that are the subject of such Contested Liens Claim. The parties agree to cooperate in any defense or settlement of any such Claim and Lien Amounts and interest and penalties thereon and such to give each other sums as may be necessary reasonable access to all information relevant thereto subject to appropriate confidentiality agreements. The parties will similarly cooperate in the judgment prosecution of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon claim or lawsuit against any bond or title indemnity furnished as aforesaidthird party.
Appears in 5 contracts
Samples: Participation Agreement, Participation Agreement, Participation Agreement
Contests. Notwithstanding anything (a) Nothing in this Agreement shall be construed to prevent the General Partner from contesting in good faith, as the tax matters partner of Parent OP in accordance with the OP Agreement, any claim that, if successful, would result in an indemnity payment pursuant to Section 6.
(b) The LVP Parties shall provide written notice to Parent OP promptly after learning of any audit or other proceeding involving a LVP Party for which Parent OP could have an indemnification obligation under Section 6 (a “Proceeding”). Failure to provide prompt written notice of a Proceeding shall preclude any indemnity hereunder to the contrary herein containedextent Parent OP is materially prejudiced thereby.
(i) Upon receipt of notice of a Proceeding, Parent OP shall either (i) assume the conduct and control of the settlement or defense of such Proceeding, and the LVP Parties shall cooperate with Parent OP in connection therewith (including, for example, signing a power of attorney with respect to such Proceeding) or (ii) advise the LVP Parties that it does not wish to control such Proceeding, in which case Parent OP shall bear all costs and expenses of a nationally recognized law firm retained to represent the LVP Parties in such Proceeding, which counsel shall be reasonably acceptable to Parent OP. In either event, the Mortgagor party not controlling the Proceeding shall be given the right to participate in such Proceeding, at its own expense. So long as Parent OP is reasonably contesting any Proceeding, the LVP Parties (or their Indirect Owners) shall not pay or settle any such Proceeding without the consent of Parent OP, which consent may be withheld in Parent OP’s sole discretion.
(ii) Subject to Section 12(b)(iii), (a) a final determination under Section 1313 of the Code of the claim underlying the Proceeding shall be binding on Parent OP and the LVP Parties and (b) if the LVP Parties are found liable for the Taxes that were the subject of the Proceeding, and it is determined that such Taxes were caused by Parent OP’s breach of this Agreement, Parent OP shall promptly pay the LVP Parties the amount payable pursuant to Section 6 of this Agreement.
(iii) Notwithstanding the foregoing, if either Parent OP or the LVP Parties disputes the finding with respect to causation, Parent OP shall select a nationally recognized accounting firm or law firm experienced in tax protection matters and reasonably acceptable to Representative (the “Dispute Firm”) to review the indemnification claim and the applicable provisions of this Agreement. The Dispute Firm shall have fifteen (15) business days (or such additional time as the Dispute Firm determines is reasonably necessary) to review such materials and deliver to Parent OP and Representative its determination of whether any amount is due under this Agreement. The determination of the Dispute Firm shall be final and binding on the parties to this Agreement, and Parent OP shall promptly pay over to the LVP Parties such amounts determined by the Dispute Firm to be due under this Agreement and the LVP Parties shall have no further recourse against Parent OP for the indemnification claim with respect to which such amounts have been paid. Parent OP shall bear all costs and expenses of the Dispute Firm; provided, the LVP Parties shall bear such costs if Parent OP is found to have no liability pursuant to this Agreement.
(c) Subject to paragraphs (a) and (b) above, the LVP Parties shall have the right to contest by appropriate legal proceedings diligently prosecuted participate in any Taxes imposed audit, claim for refund, or assessed upon administrative or judicial proceeding involving any asserted Tax liability, refund, or adjustment to the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice taxable income of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided party hereto that could result in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture disallowance of the Premises, and shall permit the Lender to be represented tax treatment set forth in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest Section 9 at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidits own expense.
Appears in 5 contracts
Samples: Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Tax Matters Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Contests. Notwithstanding anything Lessee shall pay on or before the time or times prescribed by law any Taxes (except any Taxes excluded by the proviso to Section 7.2(a)); provided, however, that Lessee shall be under no obligation to pay any such Tax so long as the payment of such Tax is not delinquent or is being contested by a Permitted Contest and Lessee shall have otherwise complied with this Section 7.2(b). If any claim or claims is or are made against any Indemnitee solely for any Tax which is subject to indemnification as provided in Section 7.2(a), Indemnitee shall as soon as practicable, but in no event more than thirty (30) days after receipt of formal written notice of the Tax or proposed Tax, notify Lessee and if, in the reasonable opinion of Lessee and (in the case of any Tax which may reasonably be expected to exceed $100,000 in the aggregate) tax counsel acceptable to the contrary herein containedIndemnitee, there exists a basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and if the provisos of the definition of "Permitted Contest" continue to be satisfied and so long as no Lease Event of Default exists), Lessee at its expense may, to the extent permitted by Applicable Laws, contest such Tax, and subsequently may appeal any adverse determination, in the appropriate administrative and legal forums; provided, that in all other circumstances, upon notice from Lessee to such Indemnitee that there exists a basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to Lessee acceptable to the Indemnitee), the Mortgagor Indemnitee, at Lessee's expense, shall contest any such Tax. Lessee shall pay all expenses incurred by the Indemnitee in contesting any such Tax (including all reasonable attorneys' and accountants' fees, including the reasonable allocated costs of internal counsel), upon demand by the Indemnitee. Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that any such Contested Lien shall be determined adverse to participation Participation Agreement by such Person does not interfere with the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion Indemnitee's control of the Lender, and notwithstanding any such contest, and Lessee shall in all events be kept informed, to the Premises extent practicable, of material developments relative to such proceedings. To the extent that more than one Indemnitee is making a demand for indemnification under Section 7.2(a) based upon the imposition of the same Tax and such Indemnitees' interests do not raise actual or potential conflicts of interest, Lessee shall be in jeopardy or in danger reimburse such Indemnitees for only the reasonable attorney's fees of being forfeited or foreclosedone counsel to such Indemnitees; provided that if during any contest of such Claim any Indemnitee's interest may conflict with the Mortgagor interest of the other Indemnitee, each such Indemnitee shall fail so be entitled to doreimbursement from Lessee on demand of its reasonable attorneys' fees in connection with such contest. The Indemnitee shall have the right to participate in the conduct of any proceedings controlled by Lessee, and the Indemnitee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim for which Lessee would be required to make a reimbursement payment hereunder will not be settled or compromised without Lessee's prior written consent (which consent shall neither be unreasonably delayed nor withheld), unless the provisos of the definition of "Permitted Contest" would not continue to be satisfied. Indemnitee shall endeavor to settle or compromise any such contested claim in accordance with written instructions received from Lessees; provided that: (x) Lessee on or before the date the Indemnitee executes a settlement or compromise pays the contested Tax to the extent agreed upon or makes an indemnification payment to the Indemnitee in an amount acceptable to the Indemnitee; and (y) the settlement or compromise does not, in the reasonable opinion of the Indemnitee, materially adversely affect the right of such Indemnitee to receive Rent or the Lease Balance or any other payment pursuant to the Operative Documents, or involve a material risk of sale, forfeiture or loss of any Equipment or any interest therein or any matter described in the provisos to the definition of "Permitted Contest". The failure of an Indemnitee to timely contest a claim against it for any Tax which is subject to indemnification under Section 7.2(a) and for which it has an obligation to Lessee to contest under this Section 7.2(b) in the manner required by Applicable Laws where Lessee has timely requested that such Indemnitee contest such claim shall relieve Lessee of its obligations to such Indemnitee under Section 7.2(a) with respect to such claim to the extent such failure results in the loss of an effective contest. If Applicable Laws require the payment of a contested Tax as a condition to, or regardless of, its being contested, and Lessee chooses to contest such Tax or to direct the Indemnitee to contest such Tax in accordance with this Section, then Lessee shall provide the Indemnitee with the funds to pay such Tax, such provision of funds Participation Agreement to be deemed a non-interest bearing loan by Lessee to the Indemnitee to be repaid by any recovery of such Tax from such contest and any remaining unpaid amount not recovered to offset Lessee's obligation to indemnify the Indemnitee for such Tax. Lessee shall indemnify the Indemnitee on a grossed-up basis in accordance with Section 7.5 for and against any adverse consequences of any such interest-free loan. In the event that the Indemnitee receives a refund (or like adjustment) in respect of any Tax for which the Indemnitee has been reimbursed by Lessee, the Lender mayIndemnitee shall within ten (10) days remit the amount of such refund (or like adjustment) to Lessee, but net of all costs and expenses incurred by such Indemnitee; provided, however, that the Indemnitee shall not be required to remit any amount pursuant to this sentence in excess of the amounts previously paid by Lessee to, pay all or on behalf of, such Contested Liens and Lien Amounts and interest and penalties thereon and Indemnitee with respect to such other sums as may be necessary in the judgment of the Lender Tax pursuant to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidArticle VII.
Appears in 3 contracts
Samples: Participation Agreement (Electric Lightwave Inc), Participation Agreement (Electric Lightwave Inc), Participation Agreement (Electric Lightwave Inc)
Contests. Notwithstanding anything If any claim for a Liability is made against Borrower or any Indemnitee and such party has received notice thereof, such party receiving notice of such Liability shall promptly notify all affected Indemnitees or Borrower, as the case may be, provided, that the failure to provide such notice promptly or to notify Borrower shall not release Borrower from any of its obligations to indemnify hereunder, except to the contrary herein containedextent that such failure adversely affects any applicable defense or counterclaim, or otherwise increases the Mortgagor amount Borrower would have been liable for in the absence of such failure. If no Specified Default shall exist, Borrower shall have the right to contest by appropriate legal proceedings diligently prosecuted investigate and defend or (so long as Borrower has acknowledged in writing to the relevant Indemnitee that Borrower is liable to such Indemnitee for such Liability), compromise any Taxes imposed or assessed upon the Premises or Liability for which it may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”)required to indemnify under this Section 9.01, and no Contested Lien each Indemnitee agrees to cooperate with all reasonable requests of Borrower in connection therewith. Notwithstanding any of the foregoing to the contrary, Borrower shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice not be entitled to assume responsibility for and control of any Contested Lien to such judicial or administrative proceedings or compromise any Liability if (aa) any Specified Default shall exist, or (bb) such proceedings would involve the Lender at imposition of criminal liability on an Indemnitee or if such contest will, in the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) reasonable opinion of such Contested LienIndemnitee, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period be inappropriate under applicable standards of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) professional conduct. The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including reasonable fees and expenses of the Lendersuch Indemnitee’s counsel shall be paid by Borrower if any of the circumstances described in clauses (aa) or (bb) above exists. An Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Borrower pursuant to the preceding provisions. Each Indemnitee shall cooperate with all reasonable requests of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paidinsurers in the exercise of their rights to investigate, and payable upon demand);
(d) The Mortgagor shall pay each defend, or compromise such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and claim as may be required by such policy to maintain the insurance coverage provided to the parties thereunder. To the extent that any such Contested Lien Indemnitee receives indemnification payments under this Section 9.01, Borrower shall be determined adverse subrogated to such Indemnitee’s rights with respect to the Mortgagortransaction or event requiring or giving rise to such indemnity to the extent of any indemnity payment made, or (ii) forthwith upon demand other than to any insurance policies maintained by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidIndemnitee.
Appears in 3 contracts
Samples: Credit Agreement (Mesa Air Group Inc), Credit Agreement (Mesa Air Group Inc), Credit Agreement (Mesa Air Group Inc)
Contests. Notwithstanding anything (a) If any written claim shall be made against any Indemnified Person or if any proceeding shall be commenced against any Indemnified Person (including a written notice of such proceeding) for any Taxes as to which Lessee shall have an indemnity obligation pursuant to Section 8.01, such Indemnified Person shall promptly notify Lessee in writing and shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days after the giving of such notice to Lessee; provided, however, that the failure to so notify Lessee shall not relieve Lessee of its obligations under this Article VIII unless such failure precludes Lessee from pursuing a contest of such Taxes; provided further, however, that, if such Indemnified Person shall be required by law or regulation to take action prior to the contrary herein containedend of such 30-day period, such Indemnified Person shall, in such notice to Lessee, so inform Lessee, and such Indemnified Person shall not take any action with respect to such claim or Tax without the Mortgagor consent of Lessee before the date such Indemnified Person shall be required to take action. If requested by Lessee in writing within 30 days after the giving of such notice (or by such earlier date referred to in the preceding sentence), such Indemnified Person shall, at the expense of Lessee (including all costs, expenses and reasonable attorneys' and accountants' fees and disbursements), in good faith contest the validity, applicability or amount of such Taxes by, in the case of a contest involving only Taxes for which Lessee is liable (a "Lessee-Controlled Contest"), in the Lessee's sole discretion, or, in the case of any other contest (an "Indemnified Person-Controlled Contest"), in such Indemnified Person's sole discretion, (i) resisting payment thereof, (ii) not paying the same except under protest, if protest shall be necessary and proper, or (iii) if payment shall be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings; provided, however, that in no event shall such Indemnified Person be required to contest the imposition of any Tax for which Lessee is obligated pursuant to this Article VIII unless (t) Lessee shall have made all payments than payable under the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon terms of the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises Operative Documents; (each, a “Contested Lien”), and u) no Contested Lien shall constitute an Lease Event of Default under this Mortgageshall have occurred and be continuing; (v) prior to taking such action, ifLessee shall have furnished, but only if:
(a) The Mortgagor shall forthwith give notice if requested by such Indemnified Person, such Indemnified Person with an opinion of any Contested Lien Xxxxx Xxxxxxxxxx or other independent tax counsel selected by Lessee and reasonably acceptable to such Indemnified Person to the Lender at the time the same effect that a reasonable basis exists for such contest; (w) Lessee shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) have acknowledged its liability to such Indemnified Person for an indemnity payment pursuant to this Article VIII as a result of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest claim or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) Tax if and to the extent such Indemnified Person shall not prevail in the contest of such claim or Tax, provided that any such Contested Lien acknowledgment shall be determined adverse of no force or effect to the Mortgagorextent the contest is resolved on an articulated basis that clearly does not constitute a basis for indemnification hereunder; (x) Lessee shall have agreed in writing to pay such Indemnified Person all reasonable costs and expenses that such Indemnified Person shall incur in connection with contesting such claim (including all costs, expenses, reasonable legal and accounting fees and disbursements); (y) such Indemnified Person, Indenture Trustee and Owner Participant shall have reasonably determined that the action to be taken will not result in any material danger of sale, forfeiture or loss of, or the creation of any Lien (iiexcept if Lessee shall have adequately bonded such Lien or otherwise made provision to protect the interests of such Indemnified Person, Loan Participants and Owner Participant in a manner reasonably satisfactory to such Indemnified Person, Indenture Trustee and Owner Participant) forthwith upon demand on the Facility or any interest therein or in any interference with timely payments of Rent or any amount on the Loan Certificates from time to time becoming due and payable; and (z) if such contest shall involve payment of the claim, Lessee shall advance the amount thereof plus interest, penalties and additions to tax with respect thereto to such Indemnified Person on an interest- free basis and with no additional net after-tax cost to such Indemnified Person. In the sole discretion of an Indemnified Person, any contest required to be pursued by such Indemnified Person pursuant to this Article VIII shall be conducted by Lessee in the Lender ifname of such Indemnified Person or Lessee. Lessee shall control the conduct (including the choice of forum) of a Lessee-Controlled Contest and the relevant Indemnified Person shall control the conduct (including the choice of forum) of an Indemnified Person-Controlled Contest. In addition, so long as no Lease Event of Default shall have occurred and be continuing, Lessee may, at its expense, in the opinion name of Lessee or, with the Lenderconsent of such Indemnified Person (which consent will not unreasonably be withheld), in the name of such Indemnified Person, contest (and notwithstanding control the contest of), including by way of suit for refund, any Taxes as to which Lessee would have an indemnity obligation pursuant to Section 8.01, if such contestcontest can be conducted independently of any proceeding involving a tax liability of such Indemnified Person that is not indemnified by Lessee hereunder; provided, the Premises however, that Lessee may take no action in contesting any claim if Indenture Trustee, such Indemnified Person or Owner Participant shall be have reasonably determined that such action will result in jeopardy or in any material danger of being forfeited sale, forfeiture or foreclosed; provided that loss of, or the creation of any Lien (except if Lessee shall have adequately bonded such Lien or otherwise made provision to protect the Mortgagor shall fail so interests of such Indemnified Person and Owner Participant in a manner reasonably satisfactory to dothem) on the Facility or any interest therein or any interference with timely payments of Rent or any amounts on the Loan Certificates from time to time becoming due and payable.
(b) Notwithstanding anything contained in Section 8.03(a), the Lender may, but shall an Indemnified Person will not be required to, to contest or to permit Lessee to contest the imposition of any Taxes if such Indemnified Person (1) shall waive its right to indemnity under this Article VIII with respect to such Taxes and (2) shall pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and Lessee any amount expended previously paid or advanced by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in Lessee pursuant to this Article VIII by way of reimbursement with respect to such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidTaxes.
Appears in 2 contracts
Samples: Lease Agreement (New Tenneco Inc), Lease Agreement (New Tenneco Inc)
Contests. Notwithstanding anything (a) Whenever a party hereto (the "Indemnitee") becomes aware of the existence of an issue that could increase the liability for any Tax, or decrease the amount of any refund, of the other party hereto or any member of its Group or require a payment hereunder (an "Indemnity Issue"), the Indemnitee shall in good faith promptly give notice to such other party (the "Indemnitor") of such Indemnity Issue. The failure of any Indemnitee to give such notice shall not relieve any Indemnitor of its obligations under this Agreement, except to the contrary herein containedextent that such Indemnitor or its affiliate is actually materially prejudiced by such failure to give notice.
(b) The Indemnitor and its representatives, at the Indemnitor's expense, shall be entitled to participate (i) in all conferences, meetings or proceedings with any taxing authority, the Mortgagor subject matter of which is or includes an Indemnity Issue in respect of a Pre-Distribution Period and (ii) in all appearances before any court, the subject matter of which is or includes an Indemnity Issue in respect of a Pre-Distribution Period.
(c) Except as provided in Section 4.2(d), Grace-Conn. shall have the right to contest by decide as between the parties hereto how any Indemnity Issue for a Pre-Distribution Taxable Period is to be dealt with and finally resolved with the appropriate legal proceedings diligently prosecuted taxing authority and shall control all Proceedings relating thereto. Grace agrees to cooperate with Grace-Conn. in the settlement of any Taxes imposed such Indemnity Issue; provided, however, that Grace-Conn. shall act in good faith in the conduct of such Proceedings and shall keep Grace reasonably informed of any developments which can reasonably be expected to affect adversely Grace. Such cooperation shall include permitting Grace-Conn. to litigate or assessed upon otherwise resolve any such Indemnity Issue. It is expressly the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon intention of the Premises (each, a “Contested Lien”)parties to this Agreement to take, and no Contested Lien the parties shall constitute an Event of Default under this Mortgagetake, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien all actions necessary to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount establish Grace-Conn. as the Lender may reasonably estimate as interest or penalties which might arise during sole agent for Tax purposes of each member of the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring companyAffiliated Group, as may be satisfactory to if Grace-Conn. were the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture common parent of the PremisesAffiliated Group, with respect to all combined, consolidated and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses unitary Tax Returns of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at Affiliated Group for the Default Rate until paid, and payable upon demand);Pre-Distribution Taxable Periods.
(d) The Mortgagor parties jointly shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon represent the interests of (i) if the Affiliated Group in any Proceeding relating to any Straddle Period and (ii) any Foreign Packco Subsidiary in any Proceeding relating to the extent any taxable period that involves an Indemnity Issue. Neither party shall settle any dispute relating to any such Contested Lien period without the consent of the other party (which consent shall not be unreasonably withheld); provided, however, that if either party proposes a settlement and the other party does not consent thereto, the nonconsenting party shall assume control of the Proceeding (and bear all subsequently incurred costs, fees and expenses relating thereto) and the respective liabilities of the parties shall be determined adverse pursuant to Section 6.7 based on the magnitude and likelihood of success of the issues involved in the Proceeding, the reasonableness of the settlement offer, the expense of continuing the Proceeding and other relevant factors. Any other disputes regarding the conduct or resolution of any such Proceeding shall be resolved pursuant to Section 6.7. All costs, fees and expenses paid to third parties in the course of such Proceeding shall be borne by the parties in the same ratio as the ratio in which, pursuant to the Mortgagorterms of this Agreement, or (ii) forthwith upon demand the parties would share the responsibility for payment of the Taxes asserted by the Lender iftaxing authority in its claim or assessment if such claim or assessment were sustained in its entirety; provided, however, that in the opinion of the Lender, and notwithstanding event that any such contestparty hereto retains its own advisors or experts in connection with any Proceeding, the Premises costs and expenses thereof shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all borne solely by such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidparty.
Appears in 2 contracts
Samples: Tax Sharing Agreement (W R Grace & Co), Tax Sharing Agreement (Sealed Air Corp)
Contests. Subject to the rights of insurers under policies of -------- insurance maintained pursuant to Section 16 of the Charter, the Charterer shall have the right, at its sole cost and expense, to investigate, and the right in its sole discretion to defend or compromise, any Claim for which indemnification is sought under this Section 13.1, and the Indemnitee shall cooperate, at the Charterer's expense, with all reasonable requests of the Charterer in connection therewith. The Charterer will provide the Indemnitee with such information not within the control of such Indemnitee, as is in the Charterer's control or is reasonably available to
1. Where the Charterer or the insurers under a policy of insurance maintained by the Charterer undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with the defense of such claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of the Charterer or such insurers; provided, however, that if (i) in the written -------- ------- opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel or (ii) such Indemnitee has been indicted or otherwise charged in a criminal complaint in connection with a Claim not excluded by Section 13.1(a) and such Indemnitee informs the Charterer that such Indemnitee desires to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by the Charterer. Subject to the requirements of any policy of insurance, an Indemnitee may participate at its own expense in any judicial proceeding controlled by the Charterer pursuant to the preceding provisions; provided that such party's participation does not, in -------- the reasonable opinion of the independent counsel appointed by the Charterer or its insurers to conduct such proceedings, significantly interfere with such control; and such participation shall not constitute a waiver of the right to receive the indemnification provided in this Section 13.1. Notwithstanding anything to the contrary herein containedcontained herein, (x) the Mortgagor Charterer shall have not under any circumstances be liable for the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s more than one counsel (all for each of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if the Owner Participant and to the extent that any such Contested Lien shall be determined adverse to the MortgagorOwner Trust (and their respective successors and permitted assigns, or agents and servants) and (ii) forthwith upon demand by the Lender ifLoan Participants and the Indenture Trustee (and their respective successors and permitted assigns, in agents and servants), and (y) during the opinion continuance of a Charter Event of Default, the Charterer shall not compromise any Claim without the consent of the Lenderapplicable Indemnitee, and notwithstanding any such contest, the Premises shall consent not to be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidunreasonably withheld.
Appears in 2 contracts
Samples: Participation Agreement (Mobil Corp), Participation Agreement (Mobil Corp)
Contests. Notwithstanding anything In respect of the indemnification provided under Section 11.1(a), promptly after receipt by an Indemnitee of notice of any pending or threatened Claim, such Indemnitee shall, if a claim for indemnification in respect thereof is to be made against Lessee give written notice thereof to Lessee; provided that the failure to provide such prompt notice shall not limit Lessee’s obligations or prejudice any rights of such Indemnitee under Section 11.1(a) with respect to such Claim, except to the contrary herein contained, the Mortgagor shall have the right extent that such failure to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmenprovide prompt notice adversely affects Lessee’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and indemnification obligations hereunder. So long as no Contested Lien shall constitute an Lease Event of Default under this Mortgageis continuing, ifLessee at its own expense, but only if:
may elect to assume the defense of any such Claim through its own counsel, which shall be subject to the reasonable approval of the Indemnitee, on behalf of the Indemnitee (a) The Mortgagor shall forthwith give with full right of subrogation to the Indemnitee’s rights and defenses). Lessee must indicate its election to assume such defense by written notice to the Indemnitee within 30 days following receipt of Indemnitee’s notice of any Contested Lien to the Lender at Claim, or in the case of a third party claim which requires a shorter time for response then within such shorter period as specified in the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) Indemnitee’s notice of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contestClaim; provided that in lieu of such payment the Mortgagor may furnish Indemnitee has given Lessee notice thereof. If Lessee denies liability or fails to respond to the Lender a bond notice within the time period set forth above, the Indemnitee may defend or title compromise the Claim as it deems appropriate without prejudice to any of Indemnitee’s rights hereunder and with no further obligation to inform Lessee of the status of the Claim and no right of Lessee to approve or disapprove any actions taken in connection therewith by the Indemnitee. If Lessee shall have elected to assume the defense of any such Claim, then upon the request of Lessee, the Indemnitee requesting payment of indemnity in such amount and form, and issued by a bond under Section 11.1(a) shall promptly furnish Lessee with copies of any records or title insuring company, as may be satisfactory documents pertaining to the Lender;
(c) The Mortgagor shall diligently prosecute matter to be indemnified and, to the contest extent known by such Indemnitee, a reasonably detailed explanation of the circumstances giving rise to the claim of indemnification and the determination of the amount of the requested indemnity payment. Upon payment in full to Indemnitee of any Contested Lien by appropriate legal proceedings having the effect indemnity pursuant to Section 11.1(a), Lessee shall be subrogated to any right of staying the foreclosure or forfeiture Indemnitee in respect of the Premisesmatter against which such indemnity has been paid. If Lessee shall have elected to assume the defense of any such Claim, upon the written request at any time and shall permit from time to time of Lessee, Indemnitee shall, at the Lender expense of Lessee, take such reasonable actions and execute such documents as are necessary or reasonably appropriate to be represented assist Lessee in the preservation and enforcement against third parties of Lessee’s right of subrogation hereunder. The Indemnitee may employ separate counsel in any such contest Claim and shall pay all expenses incurredparticipate in the defense thereof, in so doing, including but the fees and expenses of such counsel shall be at the Lenderexpense of the Indemnitee unless the Indemnitee shall have been advised by its counsel that a conflict of interest exists in Lessee’s counsel’s representations of the Indemnitee and Lessee, in which case the fees and expenses of such Indemnitee’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to for the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion account of the Lender, Lessee. All fees and notwithstanding any such contest, the Premises expenses shall be in jeopardy or in danger paid periodically as incurred. So long as no Lease Event of being forfeited or foreclosed; provided that if the Mortgagor Default shall fail so to dohave occurred and be continuing, the Lender may, but Lessee shall not be required liable for any settlement of any such Claim effected without its consent unless Lessee shall fail to, pay or elect in writing not to, assume the defense thereof in which case the Indemnitee, without waiving any rights to indemnification hereunder, may defend such Claim and enter into any good faith settlement thereof without the prior written consent of Lessee. Lessee shall not, without the prior written consent (not to be unreasonably withheld) of the Indemnitee, effect any settlement of any such Claim unless such settlement includes an unconditional release of the Indemnitee from all liabilities that are the subject of such Contested Liens Claim. The parties agree to cooperate in any defense or settlement of any such Claim and Lien Amounts and interest and penalties thereon and such to give each other sums as may be necessary reasonable access to all information relevant thereto subject to appropriate confidentiality agreements. The parties will similarly cooperate in the judgment prosecution of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon claim or lawsuit against any bond or title indemnity furnished as aforesaidthird party.
Appears in 2 contracts
Samples: Lease and Security Agreement (Lsi Logic Corp), Lease and Security Agreement (Lsi Logic Corp)
Contests. Notwithstanding anything If no Event of Default has occurred and is then continuing, Tenant, on its own or on Landlord's behalf (or in Landlord's name), but at Tenant's sole cost and expense, upon ten days' prior Notice to the contrary herein containedLandlord, the Mortgagor shall have the right to contest may contest, by appropriate legal proceedings diligently prosecuted conducted in good faith and with due diligence, without prejudice to Landlord's rights hereunder the amount, validity or application, in whole or in part, of any Taxes imposed Imposition, Legal Requirement, Insurance Requirement, lien, attachment, levy, encumbrance, charge or assessed upon the Premises or which may be or become a lien thereon and any mechanics’claim not otherwise permitted by Article XII, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
provided that (a) The Mortgagor in the case of an unpaid Imposition, lien, attachment, levy, encumbrance, charge or claim, the commencement and continuation of such proceedings shall forthwith give notice of any Contested Lien to suspend the Lender at collection thereof from Landlord and from the time the same shall be asserted;
Property, (b) The Mortgagor shall either pay under protest neither the Property nor any Rent therefrom nor any part thereof or deposit with interest therein would be subject to any risk of being sold, forfeited, attached, foreclosed, or lost, (c) in the Lender case of a Legal Requirement, Landlord would not be in any danger of incurring any lien, charge, fine, penalty, or other civil or criminal liability for failure to comply therewith pending the full amount (the “Lien Amount”) outcome of such Contested Lienproceedings, together with (d) in the event that any such amount as the Lender may reasonably estimate as interest contest shall involve a sum of money or penalties which might arise during the period potential loss in excess of contest; provided that $100,000 then, in lieu of any such payment the Mortgagor may furnish event, Tenant shall deliver to Landlord an Officer's Certificate to the Lender effect set forth in clauses (a), (b) and (c), to the extent applicable, (e) in the case of a bond Legal Requirement or title indemnity in an Imposition, lien, encumbrance or charge, Tenant shall give such amount and form, and issued by a bond or title insuring company, reasonable security as may be satisfactory demanded by Landlord to insure ultimate payment of the Lender;
(c) The Mortgagor shall diligently prosecute the contest of same and to prevent any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure loss or injury to Landlord, including but not limited to any sale or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses affected portion of the Lender’s counsel (all Property or the Rent by reason of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paidsuch non-payment or non-compliance; provided, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contesthowever, the Premises shall be in jeopardy or in danger provisions of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but this Article shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in construed to permit Tenant to contest the judgment payment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph Rent (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.except
Appears in 2 contracts
Samples: Lease Agreement (Unison Healthcare Corp), Lease Agreement (Unison Healthcare Corp)
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify Dollar. A Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that such Lessee desires to, assume and control the Mortgagor defense thereof; provided, however, that such Lessee shall have acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action if requested to do so by such Lessee, suit or proceeding if the right contest is unsuccessful; and, provided further, that no Lessee shall be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the related Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any Material risk of Material civil liability on such Contested Tax Indemnitee or (y) will involve a Material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless the Lessees shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessees which the Lessees and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be Materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessees or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessees shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessees stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by a Lessee in accordance with the Lender ifforegoing. Each Tax Indemnitee shall at the Lessees' expense supply the related Lessee with such information and documents in such Tax Indemnitee's possession reasonably requested by such Lessee as are necessary or advisable for such Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 7.4. Unless an Event of Default shall have occurred and be continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent of Dollar, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 with respect to such Claim. Notwithstanding anything contained herein to the contrary, (a) a Tax Indemnitee will not be required to contest (and no Lessee shall be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 7.4 with respect to such claim (and any related claim with respect to other taxable years the contest of which is precluded as a result of such waiver) and (b) no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless there has been a change in law which in the opinion of Tax Indemnitee's counsel creates substantial authority for the Lender, and notwithstanding any success of such contest, . Each Tax Indemnitee and each Lessee shall consult in good faith with each other regarding the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge conduct of such liens; and any amount expended contest controlled by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaideither.
Appears in 2 contracts
Samples: Master Agreement (Dollar General Corp), Master Agreement (Dollar General Corp)
Contests. Notwithstanding anything (a) Tenant may, at its expense contest, by appropriate proceedings prosecuted diligently and in good faith, the validity, or applicability to the contrary herein containedPremises, of any Requirement with which Tenant is obligated to comply pursuant to the Mortgagor provisions of this Lease, and Landlord shall have the right cooperate with Tenant in such proceedings, provided that:
(i) Landlord shall not be subject to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed criminal penalty or assessed upon to prosecution for a crime nor shall the Premises or which may any part thereof be subject to being condemned or become a lien thereon and any mechanics’vacated, materialmen’s by reason of non-compliance or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event otherwise by reason of Default under this Mortgage, if, but only if:such contest;
(aii) The Mortgagor Tenant shall forthwith give notice defend, indemnify and hold harmless Landlord from and against any and all actions, proceedings, claims, deficiencies, judgments, suits, losses, obligations, penalties, liabilities, damages, costs and expenses (including court costs and reasonable legal fees and disbursements) which Landlord shall suffer by reason of such non-compliance or contest;
(iii) such non-compliance or contest shall not constitute or result in any violation of any Contested Lien superior lease or superior mortgage, or if such superior lease and/or superior mortgage shall permit such non-compliance or contest on condition of the taking of action or furnishing of security by Landlord, such action shall be taken and such security shall be furnished at the expense of Tenant; and
(iv) Tenant shall keep Landlord advised as to the Lender at the time the same shall be asserted;status of such proceedings.
(b) The Mortgagor Without limiting the application of subsection (a)(i) above thereto, Landlord shall either pay under protest be deemed subject to prosecution for a crime within the meaning of said subsection, if Landlord, or deposit any officer, director, partner, member, principal or employee of Landlord individually, is charged with the Lender the full amount a crime of any kind or degree whatever, whether by service of a summons or otherwise, unless such charge is withdrawn before Landlord or such officer, director, partner, member, principal or employee (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender case may reasonably estimate as interest be) is required to plead or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidanswer thereto.
Appears in 2 contracts
Samples: Office Lease, Office Lease (2U, Inc.)
Contests. Notwithstanding anything to the contrary herein contained, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed So long as (a) no Default or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under is continuing and this MortgageLease has not been declared in default, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest a contest of Taxes does not involve any danger of the sale, forfeiture or deposit with loss of the Lender the full amount (the “Lien Amount”) of such Contested LienAircraft or any interest therein, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor Lessee has provided the relevant Indemnitee with an opinion of independent tax counsel acceptable to such Indemnitee that a meritorious basis exists for contesting such claim, (d) Lessee has made adequate reserves for such Taxes, then such Indemnitee at Lessee's written request will at Lessee's sole cost and expense, take such actions as Lessee shall diligently prosecute reasonably request to contest (or, if permitted by Law, to permit Lessee to contest in the name of such Indemnitee) the validity, applicability or amount of such Taxes. If such contest is to be initiated by the payment of, and the claiming of a refund for, any Taxes, Lessee shall advance to the relevant Indemnitee sufficient funds (on an interest-free basis) to make such payments and shall indemnify such Indemnitee for any tax consequences resulting from such advance of funds. Although the relevant Indemnitee may consult in good faith with Lessee concerning the conduct of any Contested Lien by appropriate legal contest, such Indemnitee shall control the conduct of all proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender relating to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses which is brought by or on behalf of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest such Indemnitee. Any contest initiated hereunder may be settled or discontinued at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; time provided that if the Mortgagor relevant Indemnitee shall fail so have waived any right to do, indemnification for the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidTaxes being contested.
Appears in 2 contracts
Samples: Aircraft Lease Agreement (Frost Hanna Mergers Group Inc), Aircraft Lease Agreement (Frost Hanna Mergers Group Inc)
Contests. Notwithstanding anything In the event Purchaser or Sellers receives written notice of any examination, claim, settlement, proposed adjustment, administrative or judicial proceeding, or other matter ("Tax Claim") related to any Pre-Closing Taxes, Transfer Taxes or Overlap Period Taxes, Purchaser or Sellers, as the case may be, shall notify the other Parties in writing as soon as reasonably practical (but in no event more than ten (10) Business Days) after receipt of such notice. If Sellers notify Purchaser in writing within thirty (30) Business Days following receipt of such written notice they intend to exercise their rights pursuant to this Section 8.7, they shall be entitled to control the defense, prosecution, settlement or compromise of such Tax Claim, at their own expense. Purchaser shall take such action in contesting such Tax Claim as Sellers shall reasonably request from time to time, including the selection of counsel and experts and execution of powers of attorney. Purchaser shall (a) not make any payments of such Tax Claim for at least thirty (30) days (or such shorter period as may be required by applicable Law) after giving the notice required by this Section 8.7, (b) give the Sellers any information requested relating to such Tax Claim, (c) give any Tax Authority any information requested by Sellers relating to such Tax Claim, and (d) otherwise cooperate with and make internal resources available to the contrary herein containedSellers in good faith in order to effectively contest any such Tax Claim. Sellers shall reimburse Purchaser for any reasonable, out-of-pocket costs pre-approved by Sellers and demonstrated to Sellers' reasonable satisfaction that are incurred by Purchaser in providing such assistance. Purchaser shall not settle or otherwise compromise any such Tax Claim with any Taxing Authority or prosecute such contest to a determination in court or other tribunal or initial or appellate jurisdiction unless instructed to do so by the Mortgagor Sellers. Any of the Sellers may settle or otherwise compromise any such Tax Claim without Purchaser's prior written consent, except that if as a result of such settlement or compromise the Taxes payable by Purchaser would be materially increased, none of Sellers may settle or compromise such matter without Purchaser's prior written consent, which consent shall not be unreasonably withheld. In connection with any proceeding taken with respect to such matters, (i) Sellers shall keep Purchaser informed of all material developments and events relating to such matters if involving a material liability for Taxes and (ii) Purchaser shall have the right right, at its sole expense, to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented participate in any such contest proceedings. Purchaser shall cooperate with Sellers by giving them and their representatives, on prior reasonable notice, reasonable access and cooperation during normal business hours to all information, books and records pertaining to Transfer Taxes, Pre-Closing Taxes and Overlap Period Taxes. Sellers shall pay all expenses incurredreimburse Purchaser for any reasonable, out-of-pocket costs pre-approved by Sellers and demonstrated to Sellers' reasonable satisfaction that are incurred by Purchaser in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each providing such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidassistance.
Appears in 2 contracts
Samples: Purchase Agreement (Pinnacle West Capital Corp), Purchase Agreement (Sierra Pacific Resources /Nv/)
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify the Lessee. The Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Lessee desires to, assume and control the Mortgagor defense thereof; provided, however, that the Lessee shall have acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action if requested to do so by the right Lessee, suit or proceeding if the contest is unsuccessful; and, provided further, that the Lessee shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessee stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender if, Lessee in accordance with the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidforegoing.
Appears in 2 contracts
Samples: Master Agreement (Ruby Tuesday Inc), Master Agreement (Ruby Tuesday Inc)
Contests. Notwithstanding anything (i) In General
(1) Except as provided in (ii) below, if a written claim shall be made against and received by any Lender for any Tax for which Borrower is obligated to indemnify pursuant to this Section 2.6, such Lender shall notify Borrower in writing of such claim within 30 days after its receipt, and shall provide Borrower such information regarding such claim as Borrower may reasonably request; provided, however, that the failure to provide such notice within such 30 days shall not release Borrower from any of its obligations to indemnify under this Section 2.6 unless, and only to the contrary herein containedextent that, such failure has a material adverse effect on the conduct of such contest. To the extent permitted under applicable law, such Lender will not make any payments with respect to such claim for at least 30 days after giving notice of such claim to Borrower.
(2) If requested by Borrower in writing within 30 days after its receipt of such notice, such Lender shall, at the expense of Borrower and subject to subsection (3) below, contest the validity, applicability or amount of such Taxes by, in the case of a "Lender-Controlled Contest" (which shall mean any contest other than a Borrower-Controlled Contest (as defined below)), in such Lender's sole discretion or, in the case of a "Borrower-Controlled Contest" (which shall mean any contest which such Lender agrees in its sole discretion to allow Borrower to control or involving only Taxes with respect to which participation by neither the Lender nor any Affiliate of the Lender is required (it being --------- * Confidential 7 understood that any contest involving Taxes in the nature of Income Taxes or any contest conducted in the name of such Lender is a contest requiring the participation of such Lender) and no tax return of the Lender or any of its Affiliates is held open with respect to which any Lender may reasonably be viewed as having an actual or potential material liability for Taxes not indemnified against by Borrower), in Borrower's sole discretion, resisting payment thereof if practicable, not paying such Tax except under protest, if protest is necessary and proper, if payment of such Tax is made, using reasonable efforts to obtain a refund thereof, in appropriate administrative and judicial proceedings, and in the case of a Lender-Controlled Contest, considering in good faith any other reasonable action as Borrower and Borrower's counsel may reasonably request. Each Lender shall consult in good faith with Borrower and Borrower's counsel concerning the forum in which the contest is most likely to be favorably resolved and whether such contest shall be by (x) resisting payment of such Tax, (y) paying such Tax under protest or (z) paying such Tax and seeking a refund or other repayment thereof. In the case of a Lender-Controlled Contest, such Lender shall (i) keep Borrower reasonably informed regarding the progress of such contest, and (ii) consult with Borrower in good faith regarding the manner of contesting such claim, PROVIDED, HOWEVER, that the Lender shall have ultimate control over such contest and its decisions with respect to such contest shall be conclusive and binding. If requested to do so by Borrower, the Mortgagor Lender shall appeal any adverse administrative or judicial decision, [*].
(3) In no event shall a Lender be required, or Borrower be permitted, to contest the imposition of any Tax for which Borrower is obligated pursuant to this Section 2.6 unless (A) Borrower shall have agreed to pay and shall promptly on request pay on an After-tax Basis all reasonable out of pocket costs and expenses that such Lender incurs in contesting such claim or arising out of or relating to such contest and which are reasonably allocable to such claim (including legal fees and disbursements, including those on appeal, if any); (B) (unless Borrower has provided to the relevant Lender a bond or other security in form and substance acceptable to such Lender in its sole discretion) such contest is not reasonably likely to result in a material danger of the sale, seizure, forfeiture or loss of the Aircraft, or the creation of any Lien thereon other than Liens for Taxes either not yet due or being contested in good faith by appropriate proceedings and for which such reserves, if any, as are required to be provided under GAAP have been provided by Borrower; (C) if such contest shall be conducted in a manner requiring the payment of the claim, Borrower shall have advanced sufficient funds, on an interest-free basis, to make the payment required, and shall have agreed to indemnify the Lender against any additional net After-tax cost to such Lender of such advance; (D) if requested by the Lender in writing, such Lender shall have received an opinion of independent Tax counsel selected by Borrower and reasonably acceptable to such Lender and furnished at Borrower's sole expense to the effect that a "Realistic Possibility of Success" (which shall mean the standard upon which an attorney may properly advise the taking of a position on a tax return as set forth in ABA Formal Opinion 85-352) exists for contesting such claim (or, in the case of an appeal of an adverse judicial --------- * Confidential determination, a written opinion from such independent Tax counsel to the effect there is a Realistic Possibility of Success such adverse judicial determination will be reversed or substantially modified); (E) Borrower shall have delivered to such Lender a written acknowledgment of Borrower's obligation to indemnify such Lender to the extent that the contest is not successful, provided, however, that Borrower will not be bound by its acknowledgment of liability if the contest is resolved on a clear and unambiguous basis showing no such liability under this Section 2.6 with respect to such Tax; (F) if an Event of Default shall have occurred and be continuing, Borrower shall have provided security for its obligation hereunder satisfactory to the Lender by placing in escrow sufficient funds to cover any such contested Tax and the reasonably expected expenses of such contest on an After-tax Basis, or otherwise providing satisfactory (as determined in such Lender's sole discretion) provisions for payment of such amounts; (G) the aggregate amount of all indemnity payments that Borrower may [*] and (H) the claim is not for a Tax the imposition of which has been previously contested by Borrower hereunder, and such previous contest (including all allowable appeals) was decided adversely to Borrower, unless Borrower has delivered an opinion of independent Tax counsel selected by Borrower and reasonably acceptable to the Lender to the effect that, on the basis of (i) a change in applicable Law, or (ii) a difference in the underlying facts, there is currently a Realistic Possibility of Success for contesting such claim.
(4) [*] if [*]Lender shall obtain a refund of all or any part of any Tax paid, advanced or indemnified by Borrower (or of an amount which otherwise would have been a refund was used to offset another liability of such Lender not indemnified by Borrower hereunder (an "Applied Amount")), such Lender shall pay Borrower, but not before Borrower shall have made all payments theretofore due to such Lender pursuant to this Section 2.6 and any other payments theretofore due to such Lender under any of the Operative Agreements, an amount equal to the amount of such refund (or such Applied Amount), including interest received or credited and attributable thereto plus, if Borrower has paid an amount on an After-tax Basis, any net Tax benefit (or minus any net Tax detriment) realized by such Lender as a result of any refund (or Applied Amount) received, and payment made, by such Lender pursuant to this sentence, provided, that the Lender shall not be obligated to pay any amount under the preceding sentence to the extent that such amount (other than that portion attributable to interest) would exceed the amount of Taxes paid, reimbursed or advanced by Borrower to such Lender plus any other payment in respect of such Taxes paid, reimbursed or advanced, provided, further, that any amount not paid to Borrower pursuant to the foregoing limitation shall be carried forward to reduce pro tanto any future payments that Borrower may be required to make to such Lender pursuant to this Section 2.6. If any Lender shall have paid Borrower any refund (or Applied Amount) of all or part of any Tax paid by Borrower and it is subsequently determined pursuant to a contest conducted in accordance with this Section 2.6(j) that such Lender was not entitled to the refund, such determination shall be treated as the imposition of a Tax for which Borrower is obligated to indemnify such Lender pursuant to the provisions of this Section 2.6. [*] if a --------- * Confidential Lender receives an award of attorneys fees in a contest for which the Borrower has paid an allocable portion of the contest expenses, such Lender shall pay to the Borrower the same proportion of the amount of such award as the amount of such Lender's attorneys fees paid or reimbursed by the Borrower bears to the total amount of attorneys fees actually incurred by such Lender in conducting such contest, up to the amount of attorneys fees paid or borne by the Borrower in connection with such contest. [*]Lender shall have the right to settle or compromise a contest that it is otherwise required to pursue pursuant to this Section 2.6(j) if the applicable Lender has provided Borrower a reasonable opportunity to review a copy of that portion of the settlement or compromise proposal which relates to the Tax for which the applicable Lender is seeking indemnification hereunder; provided that, if (i) the applicable Lender fails to provide the Borrower such a reasonable opportunity to review such portion of such proposal or (ii) after such reasonable opportunity to review such proposal the Borrower in writing reasonably withholds its consent to all or part of such settlement or compromise proposal, the Borrower shall not be obligated to indemnify such Lender hereunder to the extent of the amount attributable to the Tax to which such settlement or compromise relates as to which the Borrower has reasonably withheld its consent and with respect to any other Tax for which a successful contest is foreclosed because of such settlement or compromise as to which the Borrower has withheld its consent. If the applicable Lender effects a settlement or compromise of such contest, notwithstanding that the Borrower has reasonably withheld its consent thereto, such Lender shall repay to the Borrower such amounts theretofore advanced by appropriate legal proceedings diligently prosecuted the Borrower pursuant to this Section 2.6(j) and the amount of any Taxes imposed Tax subject to such contest paid or assessed upon reimbursed by Borrower, to the Premises extent the Borrower has reasonably withheld its consent to the settlement or compromise thereof (together with interest at the rate applicable to refunds of such Tax on any such amount paid by the Borrower from the date paid by the Borrower to the date repaid by such Lender).
(5) [*] Lender shall obtain a refund of all or any part of any Tax paid, advanced or indemnified by Borrower (or if an amount which may be or become otherwise would have been a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon refund was used to offset another liability of the Premises Lender not indemnified by Borrower hereunder (each, a “Contested Lien”an "Applied Amount")), and no Contested Lien such Lender shall constitute an Event of Default under this Mortgage, ifpay Borrower, but only if:
(a) The Mortgagor not before Borrower shall forthwith give notice of any Contested Lien have made all payments theretofore due to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with pursuant to this Section 2.6 and any other payments theretofore due the Lender under any of the full Operative Agreements, an amount (equal to the “Lien Amount”) amount of such Contested Lienrefund (or such Applied Amount), together with including interest received or credited and attributable thereto plus, if Borrower has paid an amount on an After-tax Basis, any net Tax benefit (or minus any net Tax detriment) realized by such amount Lender as the Lender may reasonably estimate as interest a result of any refund (or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and formApplied Amount) received, and issued payment made, by a bond or title insuring companysuch Lender pursuant to this sentence, as may PROVIDED, that such Lender shall not be satisfactory obligated to pay any amount under the Lender;
preceding sentence [*](cii) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that such amount (other than that portion attributable to interest) would exceed the amount of Taxes paid, reimbursed or advanced by Borrower to such Lender plus any other payment in respect of such Contested Lien Taxes paid, reimbursed or advanced. If such Lender shall have paid Borrower any refund (or Applied --------- * Confidential 10 Amount) of all or part of any Tax paid by Borrower and it is subsequently determined pursuant to a contest conducted in accordance with this Section 2.6(j) that the Lender was not entitled to the refund, such determination shall be determined adverse treated as the imposition of a Tax for which Borrower is obligated to indemnify the Lender pursuant to the Mortgagorprovisions of this Section 2.6. If such Lender receives an award of attorneys fees in a contest for which the Borrower has paid an allocable portion of the contest expenses, or (ii) forthwith upon demand by the Lender if, in shall pay [*]to the opinion Borrower the same proportion of the amount of such award as the amount of the Lender, and notwithstanding any such contest, 's attorneys fees paid or reimbursed by the Premises shall be in jeopardy or in danger Borrower bears to the total amount of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended attorneys fees actually incurred by the Lender in so doing shall be so much additional Indebtedness bearing interest at conducting such contest, up to the Default Rate until paid, and payable upon demand; and provided further that amount of attorneys fees paid or borne by the Lender may Borrower in connection with such case use and apply monies deposited as provided contest.
(6) Nothing contained in paragraph (b) of this Section 2.6(j) shall require any Lender to contest, or permit Borrower to contest in the name of such Lender, a claim which such Lender would otherwise be required to contest pursuant to this Section 2.6(j) if such Lender shall waive payment by Borrower of any amount that might otherwise be payable by Borrower under this Section 2.6 in connection with such claim (and may demand payment any other claim for which a successful contest would be foreclosed because of the absence of, or the failure to pursue, such contest) and promptly (upon any bond or title indemnity furnished as aforesaidthe prior written approval of the Central Bank of Brazil, if such approval is required) pay to Borrower an amount equal to all funds advanced with respect to such contest by Borrower.
Appears in 2 contracts
Samples: Loan Agreement (Republic Airways Holdings Inc), Loan Agreement (Republic Airways Holdings Inc)
Contests. Notwithstanding anything In respect of the indemnification provided under Section 7.1(a), promptly after receipt by an Indemnitee of notice of any pending or threatened Claim, such Indemnitee shall, if a claim for indemnification in respect thereof is to be made against the Lessee, give written notice thereof to the contrary herein contained, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and Lessee. So long as no Contested Lien shall constitute an Event of Default under this Mortgagehas occurred and is continuing, ifthe Lessee, but only if:
at its own expense, may elect to assume the defense of any such Claim through its own counsel, which shall be subject to the reasonable approval of the Indemnitee, on behalf of the Indemnitee (awith full right of subrogation to the Indemnitee’s rights and defenses). The Lessee must indicate its election to assume such defense by written notice to the Indemnitee within thirty (30) The Mortgagor shall forthwith give days following receipt of Indemnitee’s notice of any Contested Lien to the Lender at Claim, or in the case of a third-party claim which requires a shorter time for response then within such shorter period as specified in the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) Indemnitee’s notice of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contestClaim; provided that in lieu of such payment Indemnitee has given the Mortgagor may furnish Lessee written notice thereof. If the Lessee denies liability or fails to respond to the Lender a bond notice within the time period set forth above, the Indemnitee may defend or title compromise the Claim as it deems appropriate without prejudice to any of Indemnitee’s rights hereunder. If the Lessee shall have elected to assume the defense of any such Claim, then upon the request of the Lessee, the Indemnitee requesting payment of indemnity in such amount and form, and issued by a bond under Section 7.1(a) shall promptly furnish the Lessee with copies of any records or title insuring company, as may be satisfactory documents pertaining to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender matter to be represented in any such contest and shall pay all expenses incurredindemnified and, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that known by such Indemnitee, a reasonably detailed explanation of the circumstances giving rise to the claim of indemnification and the determination of the amount of the requested indemnity payment. Upon payment in full to Indemnitee of any indemnity pursuant to Section 7.1(a), the Lessee shall be subrogated to any right of Indemnitee in respect of the matter against which such indemnity has been paid. If the Lessee shall have elected to assume the defense of any such Contested Lien shall be determined adverse Claim, upon the written request at any time and from time to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion time of the LenderLessee, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.Indemnitee
Appears in 2 contracts
Samples: Participation Agreement (Big Lots Inc), Participation Agreement (Big Lots Inc)
Contests. Notwithstanding anything (a) The Tax Indemnitee shall notify the Stockholders’ Representative in writing promptly, and in any event within thirty (30) days, of becoming aware of the commencement after the Closing Date of any Contest that could give rise to an indemnification payment under Section 7.1 (the specific issues that could give rise to such indemnification are referred to herein as “Tax Indemnifiable Matters”). Such notice shall contain factual information (to the contrary herein containedextent known to the Tax Indemnitee or its Affiliates) with respect to Tax Indemnifiable Matters in reasonable detail and shall include copies of any notice or other document (to the extent such notice or document relates to Tax Indemnifiable Matters) received from any Governmental Authority in respect thereof.
(b) The Tax Indemnitee shall control all Contests, but to the extent that a Contest involves issues for which the Tax Indemnitee may be entitled to a payment under Section 7.1(a), the Mortgagor Stockholders’ Representative or its duly appointed representatives shall be allowed to attend all meetings between the Tax Indemnitee and the Governmental Authority in question and shall be provided with copies of all material correspondence and documents, to the extent relating to Tax Indemnifiable Matters. Neither the Tax Indemnitee nor any of its Affiliates may settle or compromise any asserted Tax liability in a Contest, to the extent relating to Tax Indemnifiable Matters, without the consent of the Stockholders’ Representative, which consent shall not be unreasonably withheld or delayed. For the avoidance of doubt, a Tax Indemnitee’s decision not to contest a Contest will be considered to be a settlement of that Contest for purposes of the preceding sentence. For purposes of this Section 7.5(b), if the Tax Indemnitee and the Stockholders’ Representative cannot come to agreement as to whether consent is being, or will be, unreasonably withheld or delayed within 30 days of the Stockholders’ Representative’s initial refusal to provide consent, such disagreement shall be resolved by the Accounting Firm. The determination of the Accounting Firm shall be final and binding on both parties and may be entered and enforced in any court having jurisdiction.
(c) Notwithstanding the foregoing, Parent or one of its Affiliates, as the case may be, shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon prohibit the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented Stockholders’ Representative from participating in any Contest as it relates to a specific matter if Parent and Tax Indemnitee(s) have waived their rights to indemnity for such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidmatter.
Appears in 2 contracts
Samples: Merger Agreement (GXS Worldwide, Inc.), Merger Agreement (Open Text Corp)
Contests. Notwithstanding anything If claim is made against a Tax Indemnitee for any Tax with respect to which Lessee has an obligation under this Section 9(c), Lessor shall cause Tax Indemnitee to promptly notify the contrary herein containedLessee; provided, however, that the Mortgagor failure to so notify Lessee shall not diminish Lessee's obligations to indemnify under this Section 9(c). If reasonably requested by the Lessee in writing and provided no Event of Default shall have occurred and is continuing, Lessor, at the right sole expense of the Lessee, shall itself (or shall cause such Tax Indemnitee to) in good faith and diligently contest (and not settle without Lessee's written consent) or shall (or shall cause such Tax Indemnitee to) permit the Lessee, if desired by the Lessee, to contest in the name of the Lessee the validity, applicability or amount of such Tax. Lessor shall cause such Tax Indemnitee to contest, or shall permit the Lessee to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon (a) resisting payment thereof if practicable, (b) not paying the Premises or which may be or become a lien thereon same except under protest with funds advanced by Lessee on an interest-free basis, if protest is necessary and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”)proper, and no Contested Lien (c) if payments be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings; provided, however, that, in each such instance, the Lessor and such, Tax Indemnitee shall constitute an Event of Default under this Mortgage, if, but only ifnot be required to undertake any contest or permit the Lessee to contest unless:
(aA) The Mortgagor Lessee shall forthwith give notice have provided Lessor and the Tax Indemnitee with an opinion of legal counsel reasonably acceptable to Lessor and the Tax Indemnitee to the effect that a reasonable basis exists to contest such claim (provided, however, that no such opinion shall be necessary in order to contest such claim in meetings with auditors, revenue agents, or in other informal meetings with staff members of the applicable tax authority) and, prior to the commencement of any Contested Lien appeal of an adverse judicial decision, with an opinion of such legal counsel to the Lender at the time the same effect that a reasonable basis exists to appeal such adverse judicial decision (which opinions shall be assertedobtained at Lessee's sole cost and expense);
(bB) The Mortgagor shall either pay such proceedings, in the sole reasonable discretion of Lessor and the Tax Indemnitee, do not involve any material risk or danger of the sale, forfeiture or loss of the Aircraft or any part thereof or interest therein or the imposition of criminal penalties or sanctions against Lessor or such Tax Indemnitee or the creation of any Lien other than a Lien for Taxes not yet due or being contested in good faith by appropriate proceedings, and for payment of which such reserves if any, as are required to be provided under protest generally accepted accounting principles have been made unless Lessee has provided to the Tax Indemnitee a bond or deposit with other security reasonably satisfactory to the Lender the full amount Tax Indemnitee (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu the case [Lease Agreement] of criminal penalties or sanctions such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may other security shall be satisfactory to the LenderTax Indemnitee in its sole discretion) to protect against such risk or danger;
(cC) The Mortgagor shall diligently prosecute 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 9(c) by the highest court to which an appeal could be taken (other than the U.S. Supreme Court), 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 the Tax Indemnitee shall have received an opinion of independent tax counsel selected by the Lessee and reasonably acceptable to the Tax Indemnitee, which opinion shall be obtained at the Lessee's sole expense, to the effect that, as a result of such change, it is more likely than not that the position which the Tax Indemnitee or the Lessee, as the case may be, had asserted in such previous contest would prevail.
(D) no Event of Default shall have occurred and be continuing,
(E) prior to the commencement of any Contested Lien contest undertaken by appropriate legal proceedings having the effect Lessee or any contest undertaken by any Tax Indemnitee, the Lessee shall have delivered to such Tax Indemnitee a written acknowledgment of staying the foreclosure or forfeiture of the Premises, its obligation to indemnify fully Lessor and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Tax Indemnitee to the extent that any the contest is not successful;
(F) if such Contested Lien contest is to be initiated by the payment of, and the claiming of a refund for, such Tax, Lessee shall be determined adverse have advanced to the MortgagorTax Indemnitee sufficient funds (on an interest-free basis) to make such payments, or (ii) forthwith upon demand by the Lender ifprovided, in the opinion of the Lenderhowever, and notwithstanding that Lessee shall indemnify such Tax Indemnitee for any adverse tax consequences resulting from such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but advance. Lessee shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may deemed to be necessary in the judgment default under any of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) above indemnification provisions of this Section 9(c) so long as Lessee shall diligently prosecute a contest in conformity with the requirements of this Section 9(c)(vi), or in the case where the Lessor or a Tax Indemnitee shall be prosecuting such contest pursuant to this Section 9(c)(vi), Lessee has fulfilled all of its obligations under this Section 9(c)(vi) with respect to such contest. Notwithstanding the foregoing, if a claim is made against a Tax Indemnitee which, if successful, would result in a Tax under circumstances which would require the Lessee to indemnify such Tax Indemnitee, such Tax Indemnitee shall be released from its responsibility to contest such claim, or part thereof, if it agrees in writing with Lessee not to seek indemnification from Lessee in respect of the claim, or such part thereof to be contested. In the event a Tax Indemnitee fails diligently to [Lease Agreement] contest, or refuses to permit the Lessee to contest, a claim or part thereof which such Tax Indemnitee has the obligation to contest or to permit Lessee to contest under this Section 9(c), then Lessee shall not be obligated to indemnify such Tax Indemnitee for such claim or such part thereof and may demand such Tax Indemnitee shall refund to Lessee any amounts paid or advanced by Lessee in connection with such Tax that were the subject of such claim (plus interest from the date payment upon any bond or title indemnity furnished as aforesaidis due at the rate established for refunds by the authority imposing such Tax); provided, however, that this sentence shall not apply where a Tax Indemnitee permits the Lessee to contest and the Lessee fails to diligently contest.
Appears in 1 contract
Samples: Lease Agreement (Turn Works Acquisition Iii Sub a Inc)
Contests. Notwithstanding anything to the contrary herein contained, the Mortgagor (a) Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’right, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that permitted by law, at its own expense to contest the amount or validity, in whole or in part, of any Imposition by appropriate proceedings diligently conducted in good faith, and, notwithstanding the provisions of Paragraph 13.1 hereof, the payment of such Contested Lien shall contested Imposition may be determined adverse to postponed or deferred so long as neither the MortgagorDemised Premises nor any part thereof, nor any part of the rents, issues and profits thereof, would, by reason of such postponement or (ii) forthwith upon demand by the Lender ifdeferment, be, in the opinion reasonable judgment of the LenderLessor, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided lost and Lessor shall not be subject to any criminal or civil liability. Lease dated June 15, 1999 7 Xxxxxxxxx / Hampshire Designers, Inc.
(b) Lessee shall have the right, to the extent permitted by law, and at Lessee's sole cost and expense, to seek a reduction in the valuation of the Demised Premises assessed for real property tax purposes and to prosecute any action or proceeding in connection therewith. Lessor shall fully cooperate with Lessee in any such proceeding.
(c) Lessor shall not be required to join in any proceedings referred to in Paragraphs 13.5(a) and (b) hereof unless the provisions of any law, rule or regulation at the time in effect shall require that if such proceedings be brought by and/or in the Mortgagor name of Lessor, in which event, Lessor shall fail so join and cooperate in such proceedings or permit the same to do, the Lender maybe brought in its name, but shall not be required to, pay liable for the payment of any costs or expenses in connection with any such proceedings and Lessee shall reimburse Lessor for any and all reasonable costs or expenses which lessor may sustain or incur in connection with any such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidproceedings.
Appears in 1 contract
Samples: Credit Facility Renewal Agreement (Hampshire Group LTD)
Contests. Notwithstanding anything If any claim shall be made against any Tax -------- Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4, ----------- or if any Tax Indemnitee shall determine that any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4 may be ----------- payable, such Tax Indemnitee shall promptly notify the Lessee. The Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Lessee desires to, assume and control the Mortgagor defense thereof; provided, however, that the Lessee shall have -------- ------- acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful, and, provided further, that the Lessee shall not be entitled -------- ------- to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then control the defense of such contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Encumbrance) on the Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessee stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful; provided, however, such Tax Indemnitee shall in no -------- event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender ifLessee in accordance with the foregoing. Each Tax Indemnitee shall, at the Lessee's expense, supply the Lessee with such information and documents in such Tax Indemnitee's possession reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 7.4. Unless an Event of Default shall have ----------- occurred and be continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent ----------- of the Lessee, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 ----------- with respect to such Claim. Notwithstanding anything contained herein to the contrary, (I) a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest except on its own behalf if it is subject thereto) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 7.4 with respect to ----------- such claim (and any related claim with respect to other taxable years the contest of which is precluded as a result of such waiver) and (II) no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless there has been a change in law which, in the opinion of Tax Indemnitee's counsel, creates substantial authority for the Lender, and notwithstanding any success of such contest, . Each Tax Indemnitee and the Premises Lessee shall be consult in jeopardy or in danger of being forfeited or foreclosed; provided that if good faith with each other regarding the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge conduct of such liens; and any amount expended contest controlled by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaideither.
Appears in 1 contract
Samples: Master Agreement (Jones Financial Companies Lp LLP)
Contests. Notwithstanding anything (a) Whenever a party hereto (the "Indemnitee") becomes aware of the existence of an issue that could increase the liability for any Tax, or decrease the amount of any refund, of the other party hereto or any member of its Group or require a payment hereunder (an "Indemnity Issue"), the Indemnitee shall in good faith promptly give notice to such other party (the "Indemnitor") of such Indemnity Issue. The failure of any Indemnitee to give such notice shall not relieve any Indemnitor of its obligations under this Agreement, except to the contrary herein containedextent that such Indemnitor or its affiliate is actually materially prejudiced by such failure to give notice.
(b) The Indemnitor and its representatives, at the Indemnitor's expense, shall be entitled to participate (i) in all conferences, meetings or proceedings with any taxing authority, the Mortgagor subject matter of which is or includes an Indemnity Issue in respect of a Pre- Distribution Period and (ii) in all appearances before any court, the subject matter of which is or includes an Indemnity Issue in respect of a Pre-Distribution Period.
(c) Except as provided in Section 4.2(d), Grace-Conn. shall have the right to contest by decide as between the parties hereto how any Indemnity Issue for a Pre-Distribution Taxable Period is to be dealt with and finally resolved with the appropriate legal proceedings diligently prosecuted taxing authority and shall control all Proceedings relating thereto. Grace agrees to cooperate with Grace-Conn. in the settlement of any Taxes imposed such Indemnity Issue; provided, however, that Grace-Conn. shall act in good faith in the conduct of such Proceedings and shall keep Grace reasonably informed of any developments which can reasonably be expected to affect adversely Grace. Such cooperation shall include permitting Grace-Conn. to litigate or assessed upon otherwise resolve any such Indemnity Issue. It is expressly the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon intention of the Premises (each, a “Contested Lien”)parties to this Agreement to take, and no Contested Lien the parties shall constitute an Event of Default under this Mortgagetake, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien all actions necessary to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount establish Grace-Conn. as the Lender may reasonably estimate as interest or penalties which might arise during sole agent for Tax purposes of each member of the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring companyAffiliated Group, as may be satisfactory to if Grace-Conn. were the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture common parent of the PremisesAffiliated Group, with respect to all combined, consolidated and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses unitary Tax Returns of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at Affiliated Group for the Default Rate until paid, and payable upon demand);Pre-Distribution Taxable Periods.
(d) The Mortgagor parties jointly shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon represent the interests of (i) if the Affiliated Group in any Proceeding relating to any Straddle Period and (ii) any Foreign Packco Subsidiary in any Proceeding relating to the extent any taxable period that involves an Indemnity Issue. Neither party shall settle any dispute relating to any such Contested Lien period without the consent of the other party (which consent shall not be unreasonably withheld); provided, however, that if either party proposes a settlement and the other party does not consent thereto, the nonconsenting party shall assume control of the Proceeding (and bear all subsequently incurred costs, fees and expenses relating thereto) and the respective liabilities of the parties shall be determined adverse pursuant to Section 6.7 based on the magnitude and likelihood of success of the issues involved in the Proceeding, the reasonableness of the settlement offer, the expense of continuing the Proceeding and other relevant factors. Any other disputes regarding the conduct or resolution of any such Proceeding shall be resolved pursuant to Section 6.7. All costs, fees and expenses paid to third parties in the course of such Proceeding shall be borne by the parties in the same ratio as the ratio in which, pursuant to the Mortgagorterms of this Agreement, or (ii) forthwith upon demand the parties would share the responsibility for payment of the Taxes asserted by the Lender iftaxing authority in its claim or assessment if such claim or assessment were sustained in its entirety; provided, however, that in the opinion of the Lender, and notwithstanding event that any such contestparty hereto retains its own advisors or experts in connection with any Proceeding, the Premises costs and expenses thereof shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all borne solely by such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidparty.
Appears in 1 contract
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which Lessees may have an indemnity obligation pursuant to SECTION 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to SECTION 7.4 may be payable, such Tax Indemnitee shall promptly notify the Company. The Company shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Company desires to, assume and control the Mortgagor defense thereof; PROVIDED, HOWEVER, that the Company shall have acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, PROVIDED FURTHER, that the Company shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Company, on behalf of the Company with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iCompany) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding involves any meaningful risk of imposition of criminal liability or any material risk of civil liability on such Contested Lien Tax Indemnitee in excess of $5,000,000,(B) such proceeding involves Claims not fully indemnified by the Lessees which the Company and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by Lessees or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Company shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Company stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, PROVIDED, HOWEVER, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender if, Company in accordance with the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidforegoing.
Appears in 1 contract
Contests. Notwithstanding anything If any claim or claims is or are made against any Indemnitee for any Tax which is subject to indemnification as provided in Section 7.2(a), such Indemnitee shall as soon as practicable, but in no event more than thirty (30) days after receipt of formal written notice of the Tax or proposed Tax, notify the Lessee and if, in the reasonable opinion of the Lessee there exists a reasonable basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and if the provisos of the definition of “Permitted Contest” continue to be satisfied), the Lessee at its expense may, to the contrary herein containedextent permitted by Applicable Laws and Regulations and provided that it has acknowledged in writing its liability for the Tax at issue if the contest is not successful, contest such Tax, and subsequently may appeal any adverse determination (other than to the United States Supreme Court), in the appropriate administrative and legal forums; provided, that in all other circumstances, upon notice from the Lessee to such Indemnitee that there exists a reasonable basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to the Lessee reasonably acceptable to the Indemnitee), the Mortgagor Indemnitee, at the Lessee’s expense, shall contest any such Tax (so long as the provisos of the definition of “Permitted Contest” continue to be satisfied and, in the case of a Tax on gross or net income, the aggregate amount of the Tax exceeds $100,000); provided, further, that no contest by the Indemnitee shall be required, and no contest by the Lessee shall be permitted, so long as an Event of Default shall be continuing, unless the Lessee shall have posted a bond or other security that is reasonably satisfactory to the Participants in respect of (A) Taxes reasonably expected to arise in connection with such contest that are indemnifiable pursuant to Section 7.2(a)(i) (including any amount necessary to make payment of such Taxes on a Grossed-up Basis) and (B) the Lessee’s obligations pursuant to this Section 7.2(b) in connection with such contest. The Lessee shall pay all expenses incurred by the Indemnitee in contesting any such Tax (including, without limitation, all reasonable attorney’s and accountants’ fees and expenses), upon demand by the Indemnitee. The Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that such participation by the Lessee does not interfere with the Indemnitee’s control of such contest and the Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitee shall have the right to participate in the conduct of any proceedings controlled by the Lessee to the extent that such participation by the Indemnitee does not interfere with the Lessee’s control of such contest, and the Indemnitee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim for which the Lessee would be required to make a reimbursement payment hereunder will not be settled or compromised without the Lessee’s prior written consent or the Indemnitee waives its right to indemnification hereunder and repays the Taxes advanced by the Lessee as a non-interest bearing loan by the Lessee to such Indemnitee without interest. Indemnitee shall endeavor to settle or compromise any such Contested Lien shall be determined adverse contested claim in accordance with written instructions received from the Lessee; provided, that (i) the Lessee on or before the date the Indemnitee executes a settlement or compromise pays the contested Tax to the Mortgagor, extent agreed upon or makes an indemnification payment to the Indemnitee in an amount acceptable to the Indemnitee; and (ii) forthwith upon demand by the Lender ifsettlement or compromise does not, in the reasonable opinion of the LenderIndemnitee materially adversely affect the right of the Lessor or such Indemnitee to receive Rent or the Lease Balance or any other payment pursuant to the Operative Documents, and notwithstanding or involve a material risk of sale, forfeiture or loss of the Leased Property or any such contest, the Premises shall be in jeopardy interest therein or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary any matter described in the judgment provisos to the definition of “Permitted Contest.” The failure of an Indemnitee to (x) notify the Lessee of the Lender to obtain the release and discharge existence of any claim against such liens; and Indemnitee of any amount expended Tax as required by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) first sentence of this Section 7.2(b) or (y) contest timely a claim against it for any Tax which is subject to indemnification under Section 7.2(a) and may demand for which it has an obligation to the Lessee to contest under this Section 7.2(b) in the manner required by Applicable Laws and Regulations where the Lessee has timely requested (with regard to the time of the initial notification by Indemnitee) that such Indemnitee contest such claim, in each case shall relieve the Lessee of its obligations to such Indemnitee under Section 7.2(a) with respect to such claim only to the extent such failure results in the loss of an effective contest. If Applicable Laws and Regulations require the payment upon of a contested Tax as a condition to, or regardless of, its being contested, and the Lessee chooses to contest such Tax or to direct the Indemnitee to contest such Tax in accordance with this Section, then the Lessee shall provide the Indemnitee with the funds to pay such Tax, such provision of funds to be deemed a non-interest bearing loan by the Lessee to the Indemnitee to be repaid by any bond recovery of such Tax (including the amount of any interest received by reason of payment or title indemnity furnished as aforesaiddeposit of the Tax claimed with funds advanced by the Lessee to the Indemnitee with respect to such recovered Tax, payable on a net after-tax basis to the Indemnitee) from such contest and any remaining unpaid amount not recovered to offset the Lessee’s obligation to indemnify the Indemnitee for such Tax. The Lessee shall indemnify the Indemnitee on a Grossed-Up Basis in accordance with Section 7.6 for and against any adverse consequences of any such interest-free loan.
Appears in 1 contract
Contests. Notwithstanding anything to (a) Control. If requested by a Tax Exempt New Common Facilities Owner in writing, within 30 days of receipt of the contrary herein containednotice described in Section 3.1 hereof, the Mortgagor Tax Indemnitee, if permitted by applicable Law either (i) in the case of any Tax that may be procedurally segregated and contested independently from any Tax that is not subject to indemnification by such Tax Exempt New Common Facilities Owner, unless an adverse determination of such contest would, in such Tax Indemnitee’s good faith judgment, have an adverse effect on such Tax Indemnitee’s tax liability arising out of transactions unrelated to this transaction, shall permit such Tax Exempt New Common Facilities Owner to contest (such contest to be conducted in the name of such Tax Exempt New Common Facilities Owner, if permitted by Law, or, otherwise, in the name of such Tax Indemnitee, provided, that, if such Tax Indemnitee determines at any time, in its sole discretion, that permitting such Tax Exempt New Common Facilities Owner to conduct or continue to conduct such contest is reasonably likely to have adverse business or other consequences to such Tax Indemnitee, such Tax Indemnitee shall have the right to control (or reassert control over) such contest) or (ii) in the case of a Tax which cannot be procedurally segregated and contested independently from Taxes not subject to indemnification by such Tax Exempt New Common Facilities Owner, shall itself, contest at the expense of such Tax Exempt New Common Facilities Owner (or shall request such Tax Exempt New Common Facilities Owner to contest) in good faith (including, without limitation, by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon pursuit of judicial appeals and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”administrative procedures), the validity, applicability or amount of such Taxes by (A) resisting payment thereof, (B) not paying the same except under protest if protest shall be necessary and proper or (C) if payment shall be made, seeking a refund thereof in appropriate administrative and/or judicial proceedings; provided, however, that in no Contested Lien event shall constitute an Event of Default under this Mortgage, if, but only ifsuch contest be required or permitted or continued unless:
(a1) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender amount at the time the same shall be assertedissue (taking into account all similar and logically related issues) exceeds $50,000;
(b2) The Mortgagor prior to taking such action, such Tax Exempt New Common Facilities Owner shall either have agreed in writing to pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the PremisesTax Indemnitee, and shall permit the Lender to be represented pay on demand, all reasonable costs and expenses that such Tax Indemnitee shall incur in any connection with contesting such contest claim (including, without limitation, all legal, investigatory and shall pay all expenses incurred, in so doing, including accounting fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demanddisbursements);
(d3) The Mortgagor in the good faith judgment of such Tax Indemnitee, the action to be taken will not result in any danger of sale, forfeiture or loss of its Composite Component Ownership Interest, the New Common Facilities or any part or interest therein or the creation of any Lien (except for Permitted Encumbrances) on the Composite Component Ownership Interest, the New Common Facilities or any part or interest therein;
(4) with respect to the action to be taken, there is no risk of criminal liability or criminal penalties or fines that may be imposed with respect to such Tax Indemnitee;
(5) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, such Tax Exempt New Common Facilities Owner shall pay each advance the amount thereof plus interest, penalties and additions to Tax with respect thereto to such Contested Lien Tax Indemnitee on an interest-free basis with no additional net after-tax cost to such Tax Indemnitee to make such payment and all Lien Amounts together shall indemnify such Tax Indemnitee in form and substance satisfactory to such Tax Indemnitee against any adverse tax consequences arising from such advance;
(6) independent tax counsel selected by such Tax Exempt New Common Facilities Owner and reasonably acceptable to such Tax Indemnitee shall have furnished such Tax Indemnitee (unless waived in writing by such Tax Indemnitee) with interest an opinion prepared at such Tax Exempt New Common Facilities Owner’s expense, to the effect that there is a reasonable basis under Code Section 6662 and penalties thereon the Treasury Regulations thereunder to contest such claim);
(i7) such Tax Exempt New Common Facilities Owner shall have acknowledged in writing its obligation to indemnify such Tax Indemnitee in respect of such contested Tax in the event such contest is unsuccessful; provided, that such Tax Exempt New Common Facilities Owner shall not be bound by such acknowledgment if and to the extent that any there is a final resolution of the contest from which it can be established that such Contested Lien Tax Exempt New Common Facilities Owner would not be liable for such Tax in the absence of such acknowledgment; and
(8) in no event shall a Tax Indemnitee be determined required, or a Tax Exempt New Common Facilities Owner be permitted, to appeal an adverse judicial determination to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidUnited States Supreme Court.
Appears in 1 contract
Contests. Notwithstanding anything (a) Whenever a party hereto (the "Indemnitee") becomes aware of the existence of an issue that could increase the liability for any Tax, or decrease the amount of any refund, of the other party hereto or any member of its Group or require a payment hereunder (an "Indemnity Issue"), the Indemnitee shall in good faith promptly give notice to such other party (the "Indemnitor") of such Indemnity Issue. The failure of any Indemnitee to give such notice shall not relieve any Indemnitor of its obligations under this Agreement, except to the contrary herein containedextent that such Indemnitor or its affiliate is actually materially prejudiced by such failure to give notice.
(b) The Indemnitor and its representatives, at the Indemnitor's expense, shall be entitled to participate (i) in all conferences, meetings or proceedings with any taxing authority, the Mortgagor subject matter of which is or includes an Indemnity Issue in respect of a Pre-Distribution Period and (ii) in all appearances before any court, the subject matter of which is or includes an Indemnity Issue in respect of a Pre-Distribution Period.
(c) Except as provided in Section 4.2(d), Grace-Conn. shall have the right to contest by decide as between the parties hereto how any Indemnity Issue for a Pre-Distribution Taxable Period is to be dealt with and finally resolved with the appropriate legal proceedings diligently prosecuted taxing authority and shall control all Proceedings relating thereto. Grace agrees to cooperate with Grace-Conn. in the settlement of any Taxes imposed such Indemnity Issue; provided, however, that Grace-Conn. shall act in good faith in the conduct of such Proceedings and shall keep Grace reasonably informed of any developments which can reasonably be expected to affect adversely Grace. Such cooperation shall include permitting Grace-Conn. to litigate or assessed upon otherwise resolve any such Indemnity Issue. It is expressly the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon intention of the Premises (each, a “Contested Lien”)parties to this Agreement to take, and no Contested Lien the parties shall constitute an Event of Default under this Mortgagetake, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien all actions necessary to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount establish Grace-Conn. as the Lender may reasonably estimate as interest or penalties which might arise during sole agent for Tax purposes of each member of the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring companyAffiliated Group, as may be satisfactory to if Grace-Conn. were the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture common parent of the PremisesAffiliated Group, with respect to all combined, consolidated and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses unitary Tax Returns of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at Affiliated Group for the Default Rate until paid, and payable upon demand);Pre-Distribution Taxable Periods.
(d) The Mortgagor parties jointly shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon represent the interests of (i) if the Affiliated Group in any Proceeding relating to any Straddle Period and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, any Foreign Packco Subsidiary in the opinion of the Lender, and notwithstanding any such contest, the Premises Proceeding relating to any taxable period that involves an Indemnity Issue. Neither party shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and settle any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.dispute relating
Appears in 1 contract
Samples: Tax Sharing Agreement (Grace Specialty Chemicals Inc)
Contests. Notwithstanding anything Lessee shall pay at the time and in the manner set out in SECTION 7.2(c) any Taxes subject to indemnification pursuant to SECTION 7.2 (a); PROVIDED, HOWEVER, that Lessee shall be under no obligation to pay any such Tax so long as the payment of such Tax is not delinquent or is being contested by a Permitted Contest. If any claim is made against any Indemnitee solely for any Tax which is subject to indemnification as provided in SECTION 7.2(a), Indemnitee shall as soon as practicable, but in no event more than 20 days after receipt of written notice, notify the Lessee and if, in the reasonable opinion of tax counsel to the contrary herein containedIndemnitee in the case of any Tax that may reasonably be expected to exceed $5,000,000 in the aggregate, there exists a basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and if the PROVISOS of the definition of "Permitted Contest" continue to be satisfied and so long as no Event of Default exists), the Mortgagor Lessee at its expense may, to the extent permitted by Applicable Law, contest such Tax; PROVIDED that in, all other circumstances, upon notice from the Lessee to such Indemnitee that there exists a basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to the Indemnitee), the Indemnitee, at the Lessee's expense, shall contest any such Tax. The Lessee shall pay all expenses incurred by the Indemnitee in contesting any such Tax (including all reasonable attorneys' and accountants' fees), upon written demand by the Indemnitee. The Indemnitee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien proceedings controlled by the Lessee and the Indemnitee shall in all events be kept informed of material developments relative to such proceedings. The Lessee shall have the Lender at right to participate in the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest conduct of any Contested Lien proceedings controlled by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that such participation by such Person does not interfere with the Indemnitee's control of such contest and the Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim will not be settled or compromised without the Lessee's prior written consent (which consent shall neither be unreasonably delayed nor withheld), unless the PROVISOS of the definition of "Permitted Contest" would not continue to be satisfied. Each Indemnitee shall endeavor to settle or compromise any such Contested Lien contested claim in accordance with written instructions from the Lessee. The failure of an Indemnitee to timely contest a claim against it for any Tax for which it has an obligation to contest under this SECTION 7.2(b) shall be determined adverse relieve the Lessee of its obligations to such Indemnitee under SECTION 7.2(a) only to the Mortgagorextent such failure results in the loss of an effective contest. If Applicable Law requires the payment of a contested Tax as a condition to its being contested, and the Lessee chooses to contest such Tax or (ii) forthwith upon demand to direct the Indemnitee to contest such Tax, then the Lessee shall provide the Indemnitee with the funds to pay such Tax, as a non-interest bearing loan by the Lender if, Lessee to the Indemnitee to be repaid by any recovery of such Tax and any remaining unpaid amount to reduce the obligations to indemnify for such Tax. Lessee shall indemnify the Indemnitee on a grossed-up basis (in accordance with SECTION 7.5) for and against any adverse tax consequences of such interest-free loan. In the opinion event that the Indemnitee receives a refund (or other like adjustment) in respect of any Tax for which the Lender, and notwithstanding any such contestIndemnitee has been reimbursed by Lessee, the Premises Indemnitee shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if immediately remit the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge amount of such liens; refund to Lessee, net of all costs and expenses incurred by such Indemnitee, together with any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.actually received thereon. 39 Participation Agreement
Appears in 1 contract
Contests. Notwithstanding anything (a) Whenever a party hereto (the "Indemnitee") becomes aware of the existence of an issue that could increase the liability for any Tax, or decrease the amount of any refund, of the other party hereto or any member of its Group or require a payment hereunder (an "Indemnity Issue"), the Indemnitee shall in good faith promptly give notice to such other party (the "Indemnitor") of such Indemnity Issue. The failure of any Indemnitee to give such notice shall not relieve any Indemnitor of its obligations under this Agreement, except to the contrary herein containedextent that such Indemnitor or its affiliate is actually materially prejudiced by such failure to give notice.
(b) The Indemnitor and its representatives, at the Indemnitor's expense, shall be entitled to participate (i) in all conferences, meetings or proceedings with any taxing authority, the Mortgagor subject matter of which is or includes an Indemnity Issue in respect of a Pre-Distribution Period and (ii) in all appearances before any court, the subject matter of which is or includes an Indemnity Issue in respect of a Pre-Distribution Period.
(c) Except as provided in Section 4.2(d), Grace-Conn. shall have the right to contest by decide as between the parties hereto how any Indemnity Issue for a Pre-Distribution Taxable Period is to be dealt with and finally resolved with the appropriate legal proceedings diligently prosecuted taxing authority and shall control all Proceedings relating thereto. Grace agrees to cooperate with Grace-Conn. in the settlement of any Taxes imposed such Indemnity Issue; provided, however, that Grace-Conn. shall act in good faith in the conduct of such Proceedings and shall keep Grace reasonably informed of any developments which can reasonably be expected to affect adversely Grace. Such cooperation shall include permitting Grace-Conn. to litigate or assessed upon otherwise resolve any such Indemnity Issue. It is expressly the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon intention of the Premises (each, a “Contested Lien”)parties to this Agreement to take, and no Contested Lien the parties shall constitute an Event of Default under this Mortgagetake, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien all actions necessary to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount establish Grace- Conn. as the Lender may reasonably estimate as interest or penalties which might arise during sole agent for Tax purposes of each member of the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring companyAffiliated Group, as may be satisfactory to if Grace-Conn. were the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture common parent of the PremisesAffiliated Group, with respect to all combined, consolidated and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses unitary Tax Returns of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at Affiliated Group for the Default Rate until paid, and payable upon demand);Pre- Distribution Taxable Periods.
(d) The Mortgagor parties jointly shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon represent the interests of (i) if the Affiliated Group in any Proceeding relating to any Straddle Period and (ii) any Foreign Packco Subsidiary in any Proceeding relating to the extent any taxable period that involves an Indemnity Issue. Neither party shall settle any dispute relating to any such Contested Lien period without the consent of the other party (which consent shall not be unreasonably withheld); provided, however, that if either party proposes a settlement and the other party does not consent thereto, the nonconsenting party shall assume control of the Proceeding (and bear all subsequently incurred costs, fees and expenses relating thereto) and the respective liabilities of the parties shall be determined adverse pursuant to Section 6.7 based on the magnitude and likelihood of success of the issues involved in the Proceeding, the reasonableness of the settlement offer, the expense of continuing the Proceeding and other relevant factors. Any other disputes regarding the conduct or resolution of any such Proceeding shall be resolved pursuant to Section 6.7. All costs, fees and expenses paid to third parties in the course of such Proceeding shall be borne by the parties in the same ratio as the ratio in which, pursuant to the Mortgagorterms of this Agreement, or (ii) forthwith upon demand the parties would share the responsibility for payment of the Taxes asserted by the Lender iftaxing authority in its claim or assessment if such claim or assessment were sustained in its entirety; provided, however, that in the opinion of the Lender, and notwithstanding event that any such contestparty hereto retains its own advisors or experts in connection with any Proceeding, the Premises costs and expenses thereof shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all borne solely by such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidparty.
Appears in 1 contract
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify DAP SUB. DAP SUB shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that DAP SUB desires to, assume and control the Mortgagor defense thereof; provided, however, that DAP, if requested to do so by such Tax Indemnitee, shall have acknowledged in writing its and each Lessee's obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, provided further, that DAP SUB shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of DAP and the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessees, on behalf of DAP with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure DAP or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (ia Lessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of civil liability in excess of $5,000,000 on such Contested Lien shall be determined adverse to Tax Indemnitee or (y) will involve a material risk of the Mortgagorsale, forfeiture or loss of, or the creation of any Lien (iiother than a Permitted Lien) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding on any such contest, the Premises Leased Property or any part thereof unless DAP SUB or a Lessee shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any have posted a bond or title indemnity furnished as aforesaid.other
Appears in 1 contract
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessees may have an indemnity obligation pursuant to SECTION 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to SECTION 7.4 may be payable, such Tax Indemnitee shall promptly notify ADESA. ADESA shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that ADESA desires to, assume and control the Mortgagor defense thereof; PROVIDED, HOWEVER, that ADESA, shall have acknowledged in writing its and each Lessee's obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, PROVIDED FURTHER, that ADESA shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of ADESA and the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessees, on behalf of ADESA with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure ADESA or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (ia Lessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any risk of imposition of criminal liability or any material risk of civil liability in excess of $5,000,000 on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless ADESA or a Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessees which ADESA and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessees or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if ADESA shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Mortgagor, Tax Indemnitee and reasonably satisfactory to ADESA stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand by the Lender if, in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the Lendereffect that such appeal is more likely than not to be successful, and notwithstanding any PROVIDED, HOWEVER, such contest, the Premises Tax Indemnitee shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not no event be required to, pay all such Contested Liens to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and Lien Amounts and interest and penalties thereon and such other sums as may be necessary with its own counsel in any proceeding conducted by ADESA in accordance with the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidforegoing.
Appears in 1 contract
Samples: Master Agreement (Allete Inc)
Contests. Notwithstanding anything (1) If a written claim is made against Lessor or if any proceeding is commenced against Lessor (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, such Lessor shall promptly give Lessee notice in writing of such claim (PROVIDED, HOWEVER, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the contrary herein containedLessor unless such failure shall effectively preclude Lessee's right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for thirty (30) days following the receipt of such notice by Lessee; PROVIDED, HOWEVER, that, if Lessor shall be required by Law to take action prior to the end of such 30-day period, Lessor shall, in such notice to Lessee, so inform Lessee, and Lessor shall take no action without the consent of Lessee for as long as it is legally able to do so (it being understood that Lessor shall be entitled to pay the Tax claimed and sue for a refund prior to the end of such 30-day period if (i)(A) txx failure to so pay the Tax would result in penalties (unless immediately reimbursed by Lessee) or (B) the failure to so pay would result in criminal penalties and (ii) Lessor uses its good faith efforts to 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, Lessor shall (PROVIDED that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim in writing in a manner reasonable satisfactory to Lessor) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within thirty (30) days or such shorter period as may be required by Law after its receipt of such notice, Lessor shall, at the expense of Lessee (including all reasonable out-of-pocket costs, and reasonable in-house or outside attorney and accountants fees), in good faith contest (or, if permitted by applicable law, allow Lessee to contest), through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by resisting payment thereof, not paying the same except under protest if protest is necessary and proper or 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 Lessee in writing, Lessor shall appeal any adverse administrative or judicial decision, except that Lessor shall not be required to (nor shall Lessee have the right to) pursue any appeals to the United States Supreme Court. If and to the extent Lessor by exercise of reasonable good faith efforts is able to separate the contested issue or issues (which cannot include income tax issues) from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the good faith judgment of Lessor, materially adversely affecting it, Lessor shall permit Lessee to control the conduct of any such proceeding and shall provide to Lessee such information or data that is in such Lessor's control or possession that is reasonably necessary to conduct such contest and Lessee shall consult with the Lessor and keep it reasonably informed of the progress of such contest. In the case of a contest controlled by Lessor, Lessor shall conduct and control such contest, PROVIDED Lessor consults with Lessee in good faith regarding the manner of contesting such claim and shall keep Lessee reasonably informed regarding the progress of such contest but Lessor shall have ultimate control over all aspects of such contest. Lessor shall not fail to take any action expressly required by this SECTION 3(i)(D) (including, without limitation, any action regarding an appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of Lessee except as contemplated by SECTION 3(i)(D) herein.
(2) Notwithstanding the foregoing, in no event shall Lessor be required to take any action (or to permit Lessee to take any action) unless and until (A) Lessee shall have agreed to pay Lessor on demand on an After-tax Basis all reasonable costs and expenses that Lessor shall incur in connection with contesting such claim, (including without limitation, all costs, expenses, losses, reasonable legal and accounting fees, disbursements, penalties, fines, additions to Tax or interest thereon), (B) if such contest shall involve the payment of the claim, Lessee shall advance the amount thereof plus (to the extent indemnified hereunder) 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 basis and with no additional net after-tax cost to Lessor (and Lessor shall promptly pay to Lessee any net realized tax benefits resulting from any imputed interest deduction arising from such interest free advance from Lessee plus any net tax benefits resulting from making any such payment), (C) Lessor shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, foreclosure, sale or loss of the Aircraft or the creation of any Lien (other than a Permitted Lien) (unless Lessee shall have adequately bonded such Lien or otherwise made provisions to protect the interests of Lessor in a manner reasonably satisfactory to Lessor in its sole discretion), (D) no Event of Default shall have occurred and be continuing at the time the contest is begun unless Lessee has provided security for its obligations hereunder by advancing to Lessor before proceeding with such contest, the Mortgagor amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by Lessor for reasonable expenses, (E) in the case of a contest that is being pursued by Lessor, the aggregate amount of the claim together with the amount of all related claims that have been or could be raised with any or all of the other Aircraft leased by Lessor to Lessee or raised in any other audit for which Lessee would have an indemnity obligation under this SECTION 3(i)(D) is at least $50,000, and (F) if requested prior to or during the contest by Lessor, independent tax counsel selected by Lessee and reasonably acceptable to Lessor, renders to Lessor a written opinion that there is a reasonable basis (under the standard set forth in ABA Formal Opinion 85-352 or any successor thereto) for contesting such claim. In the case of any contest controlled by the Lessee hereunder, Lessor (including its counsel (at Lessor's expense)) shall have the right to participate in all proceedings and Lessee shall consult with Lessor in good faith regarding the manner of contesting such claim and shall keep Lessor reasonably informed regarding the progress of such contest and, if requested by appropriate legal proceedings diligently prosecuted Lessor, provide an opinion of tax counsel selected by Lessee and reasonably acceptable to Lessor to the effect that there is a Reasonable Basis for contesting such claims. Notwithstanding the foregoing, Lessee shall not be permitted to control or conduct any contest if such contest involves Taxes imposed based on or assessed upon measured by the Premises gross or net income of Lessor and PROVIDED, that if Lessor determines in good faith that it is reasonably likely that such contest may have a material adverse impact on it, Lessor may retain or reassert control of any contest Lessee would otherwise be permitted to contest, and if Lessor shall release, waive, compromise or settle any claim which may be or become a lien thereon indemnifiable by Lessee pursuant to this SECTION 3(i) without the written permission of Lessee, Lessee's obligation to indemnify Lessor with respect to such claim (and any mechanics’claim the contest of which is materially prejudiced as a result of the release, materialmen’s waiver, compromise or other liens or claims for lien upon the Premises (eachsettlement) shall terminate, a “Contested Lien”subject to this SECTION 3(i)(D), and no Contested Lien subject to SECTION 3(i)(C), Lessor shall constitute an Event of Default under this Mortgage, if, repay to Lessee any amount previously paid or advanced to Lessor with respect to such claim (but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest not amounts paid or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees advanced for costs and expenses of any contests to the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing extent such amounts have already been expended) plus interest at the Default Rate until paid, and rate that would have been payable upon demand);by the relevant taxing authority with respect to a refund of such Tax.
(d3) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iNotwithstanding anything contained in this SECTION 3(i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagorcontrary, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but Lessor shall not be required toto contest any claim if the subject matter thereof shall be of a continuing nature and shall previously have been decided adversely by a court of competent jurisdiction pursuant to the contest provisions of this SECTION 3(i)(D), pay all unless there shall have been a change in Law (or interpretation thereof) or a change in facts after the date with respect to which such Contested Liens previous contest shall have been decided, and Lien Amounts Lessor shall have received, at Lessee's expense, an opinion of independent tax counsel selected by Lessee and interest and penalties thereon and such other sums reasonably acceptable to Lessor to the effect that as may be necessary in the judgment of the Lender to obtain the release and discharge a result of such liens; change in Law (or interpretation thereof) or change in facts, it is more likely than not that Lessor will prevail in such contest.
(4) Nothing contained in this SECTION 3(i) shall require Lessor to contest or permit Lessee to contest a claim which it would otherwise be required to contest pursuant to this SECTION 3(i) if Lessor shall waive payment by Lessee of any amount that might otherwise be payable by Lessee under this SECTION 3(i) by way of indemnity in respect of such claim (and any amount expended other claim for Taxes with respect to any other taxable year the contest of which is effectively precluded by Lessor's declination to take action with respect to the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidclaim).
Appears in 1 contract
Contests. Notwithstanding anything (1) If a written claim is made against Lessor or if any proceeding is commenced against Lessor (including a written notice of such proceeding) for Taxes as to which Lessee could be liable for payment or indemnity hereunder, such Lessor shall promptly give Lessee notice in writing of such claim (PROVIDED, HOWEVER, that the failure to provide such notice shall not affect Lessee's obligations hereunder to the contrary herein contained, the Mortgagor Lessor unless such failure shall have the effectively preclude Lessee's right to contest such claim) and shall not take any action with respect to such claim or Tax without the consent of Lessee for thirty (30) days following the receipt of such notice by appropriate legal proceedings diligently prosecuted Lessee; PROVIDED, HOWEVER, that, if Lessor shall be required by Law to take action prior to the end of such 30-day period, Lessor shall, in such notice to Lessee, so inform Lessee, and Lessor shall take no action without the consent of Lessee for as long as it is legally able to do so (it being understood that Lessor shall be entitled to pay the Tax claimed and sue for a refund prior to the end of such 30-day period if (i) (A) xhe failure to so pay the Tax would result in penalties (unless immediately reimbursed by Lessee) or (B) the failure to so pay would result in criminal penalties and (ii) Lessor uses its good faith efforts to 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, Lessor shall (PROVIDED that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim in writing in a manner reasonable satisfactory to Lessor) furnish Lessee with copies of any requests for information from any taxing authority relating to such Taxes imposed or assessed upon the Premises or with respect to which Lessee may be required to indemnify hereunder. If requested by Lessee in writing within thirty (30) days or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the shorter period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to required by Law after its receipt of such notice, Lessor shall, at the Lender;
expense of Lessee (c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premisesincluding all reasonable out-of-pocket costs, and shall permit the Lender to be represented in any such contest reasonable in-house or outside attorney and shall pay all expenses incurredaccountants fees), in so doinggood faith contest (or, including fees if permitted by applicable law, allow Lessee to contest), through appropriate administrative and expenses judicial proceedings the validity, applicability or amount of such Taxes by resisting payment thereof, not paying the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, same except under protest if protest is necessary and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, proper or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to dopayment is made, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender using reasonable efforts to obtain the release and discharge of such liens; and any amount expended by the Lender a refund thereof in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.an appropriate administrative and/or judicial
Appears in 1 contract
Contests. Notwithstanding anything If the Owner Participant receives written notice of a claim by the IRS which, if sustained, would result in a Tax Loss requiring the payment of an indemnity by the Facility Lessee in excess of $50,000 as to the contrary herein containedFacility Interest, then the Owner Participant shall notify the Facility Lessee in writing of such claim within 20 days after receipt and, in the event that there are less than 20 days in which to respond to such claim, the Mortgagor shall have the right Owner Participant agrees to request an extension of time to contest by appropriate legal proceedings diligently prosecuted such claim so that the period remaining to initiate such contest is not less than 20 days from the date of the Owner Participant's notice to the Facility Lessee of such claim, and the Owner Participant agrees to take such action in contesting such claim as the Facility Lessee shall request from time to time, including, but not limited to, (i) all administrative appeals, proceedings, hearings and conferences with respect to the claim, (ii) seeking a judicial determination with respect to such claim and (iii) the appeal of any Taxes imposed or assessed upon adverse judicial determination with respect to such claim (but not to the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”U.S. Supreme Court), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only ifprovided that:
(a) The Mortgagor No Lease Event of Default shall forthwith give notice of any Contested Lien to the Lender at the time the same shall have occurred and be assertedcontinuing;
(b) The Mortgagor the Owner Participant shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish not have received prior to the Lender time before which a bond or title indemnity in response to such amount claim is due a written opinion, from independent tax counsel, selected by the Owner Participant and form, and issued by a bond or title insuring company, as may be satisfactory reasonably acceptable to the LenderFacility Lessee, setting forth in reasonable detail the facts and analysis upon which such opinion is based (a copy of which is delivered to the Facility Lessee as soon as practicable after receipt), to the effect that, with respect to any initial contest, there is not a Reasonable Basis for such contest, (or it is not "more likely than not" in the case of an appeal of adverse judicial determination);
(c) The Mortgagor the Facility Lessee shall diligently prosecute have agreed to pay, on an After-Tax Basis, all reasonable costs and expenses incurred by the contest of Owner Participant in connection with any Contested Lien by appropriate contest, including, without limitation, all reasonable legal proceedings having the effect of staying the foreclosure or forfeiture of the Premisesand other documented out-of-pocket expenses, and shall permit have provided the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of Owner Participant with adequate assurances for the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);payment thereof; and
(d) The Mortgagor the Facility Lessee shall pay each have acknowledged in writing its liability to indemnify the Owner Participant in respect of the claim if the contest is Conemaugh Tax Indemnity Agreement not successful; provided, however, that such Contested Lien acknowledgment of liability will not be binding if the contest is resolved on a clearly articulated basis which establishes that the Facility Lessee is not liable to the Owner Participant. Subject to the foregoing, the Owner Participant may forego any and all Lien Amounts together administrative appeals, proceedings, hearings and conferences with interest the IRS in respect of any claim and may, at its sole option, contest the claim in any permissible forum selected by the Owner Participant, considering, however, in good faith such requests as the Facility Lessee and its counsel shall make concerning the prudent manner in which to contest such claim. The Owner Participant may, at its sole option, either pay the tax claimed and sue xxx a refund or contest the claim in any permissible forum, considering in good faith, however, such requests as the Facility Lessee and its counsel shall make concerning the most appropriate forum in which to proceed and other related matters. If the Owner Participant chooses to pay the tax claimed and sue xxx a refund, the Facility Lessee shall advance to the Owner Participant, on an interest-free basis and with no additional net after-tax cost to the Owner Participant, sufficient funds to pay the tax and any interest, penalties thereon and additions to tax payable with respect thereto (to the extent such amount is indemnified-against by the Facility Lessee). The Owner Participant shall not settle any claim without the Facility Lessee's consent; provided, that the Owner Participant shall not be required to contest any proposed adjustment and may settle any such proposed adjustment if, (i) if the Owner Participant shall waive its right to indemnity with respect to such adjustment and shall pay to the extent that Facility Lessee any amount previously paid or advanced by the Facility Lessee with respect to such Contested Lien shall be determined adverse adjustment or the contest of such adjustment (other than amounts paid or advanced pursuant to the MortgagorFacility Lessee's obligations to pay the costs of the contest), or (ii) forthwith upon demand the subject of such contest has previously been resolved in a Final Determination for a prior taxable year adversely to the Owner Participant, unless the Facility Lessee shall have provided the Owner Participant with an opinion of independent tax counsel, selected by the Lender ifFacility Lessee and reasonably satisfactory to the Owner Participant, setting forth in reasonable detail the facts and analysis upon which such opinion is based (a copy of which is delivered to the Owner Participant), that as a result of a Tax Law Change or a change in fact, the prior Final Determination is no longer determinative of the Lenderissue. The Owner Participant (i) shall not make payment of any claim for at least 30 days after giving written notice of such claim to the Facility Lessee if such Conemaugh Tax Indemnity Agreement forbearance is permitted by law and shall inform the Facility Lessee in reasonable detail of the nature and extent of and purported basis (to the extent of the Owner Participant's knowledge thereof) for such claim, (ii) shall use good faith efforts to consult with and notwithstanding any consider in good faith the Facility Lessee's and its counsel's suggestions regarding the conduct of such contest (but the manner in which such contest is conducted shall be determined in all respects by the Owner Participant in its sole discretion) and shall keep the Facility Lessee reasonably informed as to the progress of such contest, and (iii) shall provide the Premises Facility Lessee and its counsel with copies of any correspondence (or excerpts thereof relating to the adjustment or the contest of such adjustment) or excerpts of other written material received by the Owner Participant in connection with the contest and shall be in jeopardy or in danger provide to the Facility Lessee for comment within a reasonable period of being forfeited or foreclosed; provided that if time prior to submission written materials with respect to the Mortgagor shall fail so claim submitted to dothe IRS, the Lender may, but courts or administrative tribunals or bodies involved with respect to the issues for which the Facility Lessee is liable for an indemnity hereunder (it being understood that the Facility Lessee shall not be required to, pay permitted to review any portions of such documents or submissions that relate to issues unrelated to the transactions contemplated by the Operative Documents). The Facility Lessee and its counsel shall maintain confidentiality with respect to all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in information.
(a) the judgment Facility Lessee shall pay to the Owner Participant any excess of the Lender to obtain full amount due hereunder over the release and discharge amount of such liens; and any amount expended advances previously made by the Lender in so doing shall be so much additional Indebtedness bearing interest at Facility Lessee and applied against the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited Facility Lessee's indemnity obligation as provided in paragraph aforesaid or (b) the Owner Participant shall repay to the Facility Lessee any excess of such advances over such full amount due hereunder, together with any interest received by the Owner Participant that is properly attributable to such excess amount of such advances during the period such advances were outstanding, and, if the Facility Conemaugh Tax Indemnity Agreement Lessee shall have indemnified the Owner Participant with respect to the adverse tax consequences of any advances or payments hereunder, the amount of any tax savings resulting from any payment pursuant to this Section and may demand payment upon any bond or title indemnity furnished as aforesaidsentence.
Appears in 1 contract
Samples: Tax Indemnity Agreement (Reliant Energy Mid Atlantic Power Services Inc)
Contests. Notwithstanding anything If any claim shall be made against any Tax -------- Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section ------- 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the --- Lessee may have an indemnity obligation pursuant to Section 7.4 may be ----------- payable, such Tax Indemnitee shall promptly notify the Lessee. The Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Lessee desires to, assume and control the Mortgagor defense thereof; provided, however, that the Lessee shall have acknowledged in writing its -------- ------- obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful, and, provided further, that the Lessee shall not be entitled -------- ------- to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then control the defense of such contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Encumbrance) on the Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessee stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful; provided, however, such Tax Indemnitee shall in no -------- event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender ifLessee in accordance with the foregoing. Each Tax Indemnitee shall, at the Lessee's expense, supply the Lessee with such information and documents in such Tax Indemnitee's possession reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 7.4. Unless an Event of Default shall have ----------- occurred and be continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent ----------- of the Lessee, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 ----------- with respect to such Claim. Notwithstanding anything contained herein to the contrary, (I) a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest except on its own behalf if it is subject thereto) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 7.4 with respect to such claim (and any related claim with respect ----------- to other taxable years the contest of which is precluded as a result of such waiver) and (II) no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless there has been a change in law which, in the opinion of Tax Indemnitee's counsel, creates substantial authority for the Lender, and notwithstanding any success of such contest, . Each Tax Indemnitee and the Premises Lessee shall be consult in jeopardy or in danger of being forfeited or foreclosed; provided that if good faith with each other regarding the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge conduct of such liens; and any amount expended contest controlled by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaideither.
Appears in 1 contract
Samples: Master Agreement (Jones Financial Companies Lp LLP)
Contests. If, within 30 days of receipt of a Tax Notice from an Indemnitee (or such shorter period as such Indemnitee has notified the Company is required by law or regulation for such Indemnitee to contest such Tax Loss), the Company shall request in writing that such Indemnitee contest such Tax Loss, such Indemnitee shall, at the Company's expense, in good faith conduct and control such contest (including, without limitation, by pursuit of appeals) by, in the sole discretion of the Company, (i) resisting payment thereof, (ii) not paying the same except under protest, if protest is necessary and proper, (iii) if the payment be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, or (iv) taking such other action as is reasonably requested by the Company from time to time; PROVIDED, HOWEVER, that (x) if such contest can be pursued independently from any other proceeding involving a Tax liability of such Indemnitee, such Indemnitee, at the Company's request, shall allow the Company to conduct and control such contest and (y) in the case of any contest that the Company is not entitled to control, the Indemnitee may request the Company to conduct and control such contest if possible or permissible under applicable law or regulation. Notwithstanding anything the foregoing provisions of this Section 4, such Indemnitee shall not be required to take any action and the Company shall not be able to contest such claim or Tax in its own name or that of such Indemnitee unless (i) the Company shall have agreed to pay, and shall pay, to such Indemnitee on demand all reasonable out-of- pocket third party costs and expenses that such Indemnitee may incur in connection with contesting such claim or Taxes, including all reasonable legal (including non-duplicative internal counsel), accounting and investigatory fees and disbursements, (ii) the amount of the potential indemnity exceeds $50,000, (iii) the action to be taken will not result in any material risk of criminal penalties and (iv) if such contest shall involve the payment of the Tax prior to the contrary herein containedcontest, the Mortgagor Company shall, at its option (and notwithstanding anything herein to the contrary), either (A) pay such Indemnitee for such Taxes or (B) provide to such Indemnitee an interest-free advance in an amount equal to the Tax which such Indemnitee is required to pay (with no additional net after-tax cost to such Indemnitee). In no event shall an Indemnitee be required to appeal an adverse judicial determination to the United States Supreme Court. Any Indemnitee shall consult in good faith with the Company regarding the conduct of any contest controlled by such Indemnitee, shall keep the Company fully informed as to the status of the contest and shall consider in good faith all suggestions made by the Company regarding the conduct of any such contest, subject to preserving counsel privilege in the Indemnitee's reasonable judgment. An Indemnitee shall not have the right to settle or compromise a contest by appropriate legal proceedings diligently prosecuted any Taxes imposed without the prior written consent of the Company, such consent not to be unreasonably withheld. If an Indemnitee agrees to a settlement or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) compromise of such Contested Liencontest without the prior written consent of the Company, together with such amount as Indemnitee shall waive its rights to any indemnity from the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided Company that otherwise would be payable in lieu respect of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest claim and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that Company any such Contested Lien shall be determined adverse to the Mortgagor, amount previously paid or (ii) forthwith upon demand advanced by the Lender if, in Company pursuant to this Section 4 with respect to such Taxes other than contest costs paid by the opinion of the Lender, and notwithstanding any Company pursuant to this Section 4 as it relates to such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.
Appears in 1 contract
Samples: Tax Indemnity Agreement (Safety Insurance Group Inc)
Contests. Notwithstanding anything to the contrary herein contained, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor Nothing in this Agreement shall forthwith give notice be construed to prevent UpREIT from contesting, through its Tax Matters Partner in accordance with the Partnership Agreement as part of the unified audit of the UpREIT, any claim in respect of any Contested Lien to "partnership" item of the Lender at the time the same shall be asserted;UpREIT that, if successful, would result in an Income Inclusion (a "Partnership Level Issue").
(b) The Mortgagor shall either pay If UpREIT contests a Partnership Level Issue that, if successful, would result in an Income Inclusion, UpREIT's liability for indemnification under protest or deposit with the Lender the full amount Section 4 hereof (the “Lien Amount”other than reasonable costs and expenses described in Section 6(f) of such Contested Lienthe Agreement) shall, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu at UpREIT's election, be deferred until thirty (30) days after a Final Determination of such payment the Mortgagor may furnish to the Lender a bond or title indemnity Xxxxx Indemnitee's federal income tax liability in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;respect of an Income Inclusion.
(c) The Mortgagor If any audit or proceeding involving an indemnifiable adjustment is being conducted in a proceeding involving such Xxxxx Indemnitee, which cannot be transferred to the UpREIT as a partnership item (a "Xxxxx Level Issue"), such Xxxxx Indemnitee hereby agrees (i) promptly to notify UpREIT in writing of such adjustment (and the failure of such Xxxxx Indemnitee to so notify UpREIT shall diligently prosecute preclude any indemnity hereunder to the extent UpREIT's right to effect its contest rights hereunder has been precluded by such failure), and (ii) upon UpREIT's delivery to of a written opinion of nationally recognized tax counsel reasonably acceptable to such Xxxxx Indemnitee ("Tax Counsel") to the effect that there is a Realistic Possibility of Success upon contest of any Contested Lien such Xxxxx Level Issue, such Xxxxx Indemnitee will contest that adjustment by appropriate legal proceedings filing a protest and administrative appeal and prosecuting the same in good faith; provided, however, that such Xxxxx Indemnitee will not be obligated to pursue an administrative appeal if such Xxxxx Indemnitee instead pursues relief in Tax Court or a court having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);refund jurisdiction.
(d) The Mortgagor shall pay each If, within 30 days following the failure of such Contested Lien administrative proceedings with respect to a Xxxxx Level Issue, UpREIT delivers to a Xxxxx Indemnitee a written opinion of Tax Counsel to the effect that there is a Realistic Possibility of Success if the proposed adjustment is presented to a court for resolution, then such Xxxxx Indemnitee will contest the proposed adjustment in good faith in the Tax Court or by paying the tax (and all Lien Amounts together with any applicable interest and penalties thereon penalties) and suing for refund in the Court of Federal Claims or appropriate Federal District Court. If, within 30 days following a final adverse decision of such court with respect to such Xxxxx Level Issue, UpREIT delivers to such Xxxxx Indemnitee a written opinion of Tax Counsel to the effect that it is more likely than not that such decision would be reversed on appeal, then such Xxxxx Indemnitee will appeal such decision to the appropriate Federal Court of Appeals. With respect to any of the above-described proceedings, such Xxxxx Indemnitee will keep UpREIT and its counsel informed as to the progress of such proceedings, give UpREIT and its counsel the opportunity to review and comment in advance on all written submissions and filings relevant to indemnifiable issues (after making appropriate redactions to preserve the confidentiality of the such Xxxxx Indemnitee return as to other issues), and consider in good faith any suggestions made by UpREIT or its counsel.
(e) Such Xxxxx Indemnitee shall present any settlement offer provided to such Xxxxx Indemnitee pursuant to a Xxxxx Level Issue to UpREIT. If UpREIT recommends acceptance of a settlement offer of a Xxxxx Level Issue or if the Tax Matters Partner recommends acceptance of a settlement offer in respect of a Partnership Level Issue, but such Xxxxx Indemnitee declines to accept such offer in writing within 30 days (if such Xxxxx Indemnitee does not respond within 30 days, such lack of response shall be treated as acceptance of UpREIT's or the Tax Matters Partner's recommendation, respectively), (1) the obligation of UpREIT to make indemnity payments as the result of any such contest or proceedings shall not thereafter exceed the obligation that it would have had if such contest had been settled or proceeding terminated on the basis recommended by UpREIT or the Tax Matters Partner, as applicable, and (2) in the case of a Xxxxx Level Issue, UpREIT shall have no further liability for costs or other expenses in respect of such contest.
(f) Notwithstanding the foregoing, such Xxxxx Indemnitee will have no obligation to contest any action with respect to a Xxxxx Level Issue (i) if unless such items could give rise to a federal income tax liability (disregarding other items in the assessment and considering effects in future years) in excess of $ __________ , (ii) without UpREIT paying when due, reasonable third-party costs and out-of-pocket expenses including reasonable legal, witness and accounting fees and other expenses and, in the case of proceedings before the Court of Federal Claims or Federal District Court, the amount of tax (and any applicable interest and penalties) for which refund is claimed, and (iii) to the extent that any such Contested Lien shall be determined adverse Xxxxx Indemnitee waives in writing UpREIT's obligation to the Mortgagorindemnify such Xxxxx Indemnitee for such items, or in which case all third-party costs and out-of-pocket expenses described in clause (ii) forthwith upon demand thereafter incurred and all taxes would be paid by the Lender if, in the opinion of the Lender, and notwithstanding such Xxxxx Indemnitee.
(g) such Xxxxx Indemnitee shall not settle any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosedXxxxx Level Issue without UpREIT's consent; provided that if the Mortgagor shall fail so to do, the Lender may, but such Xxxxx Indemnitee shall not be required toto contest any proposed adjustment and may settle any such proposed adjustment if such Xxxxx Indemnitee shall waive its right to indemnity under this Agreement with respect to such adjustment and any Income Inclusion that results from such adjustment and, in the case of proceedings before the Court of Federal Claims or Federal District Court, shall pay all such Contested Liens to UpREIT the amount of tax (and Lien Amounts and any applicable interest and penalties thereon penalties) previously paid or advanced by UpREIT with respect to such adjustment or the contest of such adjustment under Section 6(f), plus interest at ___% computed from the time such amounts were paid or advanced by UpREIT.
(h) Within thirty (30) days after a Final Determination of the liability of such Xxxxx Indemnitee in respect of a Xxxxx Level Issue, UpREIT and each Indemnitee agree to pay each other, as applicable, the net amount of (i) the payment owed by the UpREIT to such other sums as may be necessary Xxxxx Indemnitee of any indemnification hereunder, not theretofore paid resulting from the outcome of such contest, and (ii) in the judgment case of proceedings before the Court of Federal Claims or Federal District Court, the repayment owed by such Xxxxx Indemnitee to UpREIT of the Lender amount of tax (and any applicable interest and penalties) previously paid or advanced by UpREIT with respect to obtain such adjustment or the release and discharge contest of such liens; and adjustment under Section 6(f), together with any amount expended interest received by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further or credited to such Xxxxx Indemnitee that the Lender may in is attributable to such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidadvance.
Appears in 1 contract
Contests. Notwithstanding anything Lessee shall pay on or before the time or times prescribed by law any Taxes (except any Taxes excluded by the proviso to Section 7.2(a)); provided, however, that Lessee shall be under no obligation to pay any such Tax so long as the payment of such Tax is not delinquent or is being contested by a Permitted Contest. If any claim or claims is or are made against any Indemnitee for any Tax which is subject to indemnification as provided in Section 7.2(a), Indemnitee shall as soon as practicable, but in no event more than 20 days after receipt of formal written notice of the Tax or proposed Tax, notify Lessee and if, in the reasonable opinion of Lessee and (in the case of any Tax which may reasonably be expected in the aggregate to exceed $50,000) tax counsel acceptable to the contrary herein containedIndemnitee, there exists a basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and if the provisos of the definition of "Permitted Contest" continues to be satisfied and so long as no Lease Event of Default exists), Lessee at its expense may, to the extent permitted by Applicable Laws and Regulations, contest such Tax, and subsequently may appeal any adverse determination, in the appropriate administrative and legal forums; provided that in all other circumstances, upon notice from Lessee to such Indemnitee that there exists a basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to Lessee acceptable to the Indemnitee), the Mortgagor Indemnitee, at Lessee's expense, shall contest any such Tax. Lessee shall pay all expenses incurred by the Indemnitee in contesting any such Tax (including all reasonable attorneys' and accountants' fees, including the allocated costs of internal counsel), upon demand by the Indemnitee. Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that such participation by such Person does not interfere with the Indemnitee's control of such contest and Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitee shall have the right to participate in the conduct of any proceedings controlled by Lessee and the Indemnitee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim for which Lessee would be required to make a reimbursement payment hereunder will not be settled or compromised without Lessee's prior written consent (which consent shall neither be unreasonably delayed nor withheld), unless the provisos of the definition of "Permitted Contest" would not continue to be satisfied. Indemnitee shall endeavor to settle or compromise any such Contested Lien shall be determined adverse contested claim in accordance with written instructions received from Lessee, provided that: (x) Lessee on or before the date the Indemnitee executes a settlement or compromise pays the contested Tax to the Mortgagor, extent agreed upon or makes an indemnification payment to the Indemnitee in an amount acceptable to the Indemnitee; and (iiy) forthwith upon demand by the Lender ifsettlement or compromise does not, in the reasonable opinion of the LenderIndemnitee materially adversely affect the right of such Lessor to receive Rent or the Lease Balance or any other payment pursuant to the Operative Documents, or involve a material risk of sale, forfeiture or loss of any Site or any interest therein or any matter described in the provisos to the definition of "Permitted Contest". The failure of an Indemnitee to timely contest a claim against it for any Tax which is subject to indemnification under Section 7.2(a) and for which it has an obligation to Lessee to contest under this Section 7.2(b) in the manner required by Applicable Laws and Regulations where Lessee has timely requested that such Indemnitee contest such claim shall relieve Lessee of its obligations to such Indemnitee under Section 7.2(a) with respect to such claim to the extent such failure results in the loss of an effective contest. If Applicable Laws and Regulations require the payment of a contested Tax as a condition to, or regardless of, its being contested, and notwithstanding Lessee chooses to contest such Tax or to direct the Indemnitee to contest such Tax in accordance with this Section, then Lessee shall provide the Indemnitee with the funds to pay such Tax, such provision of funds to be deemed a non-interest bearing loan by Lessee to the Indemnitee to be repaid by any recovery of such contestTax from such contest and any remaining unpaid amount not recovered to offset Lessee's obligation to indemnify the Indemnitee for such Tax. Lessee shall indemnify the Indemnitee on a grossed-up basis (in accordance with Section 7.5) for and against any adverse tax consequences of such interest-free loan. In the event that the Indemnitee receives a refund (or like adjustment) in respect of any Tax for which the Indemnitee has been reimbursed by Lessee, the Premises Indemnitee shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if immediately remit the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge amount of such liens; refund (or like adjustment) to Lessee, net of all costs and any amount expended expenses incurred by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidIndemnitee.
Appears in 1 contract
Samples: Participation Agreement (Genesis Health Ventures Inc /Pa)
Contests. Notwithstanding anything Lessee shall pay on or before the time or times prescribed by law any Taxes that Lessee is liable for hereunder. If any claim or claims is or are made against any Indemnitee for any Tax which is subject to indemnification as provided in Section 7.2(a), Indemnitee shall as soon as practicable, but in no event more than 30 days after receipt of formal written notice of the Tax or proposed Tax, notify the Lessee. If requested by Lessee in writing within 30 days of Lessee's receipt of such notice from the Indemnitee, such Indemnitee shall contest (including all judicial appeals other than to the contrary herein containedUnited States Supreme Court), at the Mortgagor expense of Lessee, in the name of such Indemnitee (or such Indemnitee, in its sole discretion, may require Lessee, if permitted by Applicable Laws and Regulations, to contest in the name of Lessee or such Indemnitee) the validity, applicability or amount of such Tax; provided that such contest shall be required only if (i) in the reasonable opinion of Lessee and its tax counsel reasonably acceptable to such Indemnitee, there exists a reasonable basis, within the meaning of ABA Formal Opinion No. 85-352, to contest such Tax, (ii) no Lease Event of Default has occurred and is continuing, (iii) Lessee has acknowledged in writing its liability for the Tax at issue to the extent the contest is not successful, (iv) the contest will not result in a risk of criminal liability of an Indemnitee or a material risk of sale, loss or forfeiture of the Aircraft or any part thereof or interest therein, (v) the amount of the Tax exceeds $25,000, and (vi) Lessee pays all reasonable expenses incurred by the Indemnitee in contesting any such Tax (including, without limitation, all reasonable attorneys' and accountants' fees), upon demand by the Indemnitee. Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that such participation by such Person does not interfere with the Indemnitee's control of such contest and Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitee shall have the right to participate in the conduct of any proceedings controlled by Lessee to the extent that such participation by such Person does not interfere with Lessee's control of such contest, and the Indemnitee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim for which Lessee would be required to make a reimbursement payment hereunder will not be settled or compromised without Lessee's good faith prior written consent unless the Indemnitee waives its right to indemnification hereunder and repays the Taxes advanced by Lessee as a non-interest bearing loan by Lessee to such Indemnitee (as provided below) with interest at the Overdue Rate from the date of payment until receipt thereof by Lessee. Indemnitee shall endeavor to settle or compromise any such Contested Lien shall be determined adverse contested claim in accordance with written instructions received from the Lessee; provided, that (x) Lessee on or before the date the Indemnitee executes a settlement or compromise pays the contested Tax to the Mortgagor, extent agreed upon or makes an indemnification payment to the Indemnitee in an amount acceptable to the Indemnitee; and (iiy) forthwith upon demand by the Lender ifsettlement or compromise does not, in the reasonable opinion of the LenderIndemnitee, adversely affect the right of the Certificate Trustee or such Indemnitee to receive Rent or the Lease Balance or any other payment pursuant to the Operative Documents, or involve a material risk of sale, forfeiture or loss of any Aircraft or any interest therein. The failure of an Indemnitee to contest timely a claim against it for any Tax which is subject to indemnification under Section 7.2(a) and for which it has an obligation to Lessee to contest under this Section 7.2(b) in the manner required by Applicable Laws and Regulations where Lessee has timely requested that such Indemnitee contest such claim shall relieve Lessee of its obligations to such Indemnitee under Section 7.2(a) with respect to such claim only to the extent such failure results in the loss of an effective contest. If Applicable Laws and Regulations require the payment of a contested Tax as a condition to, or regardless of, its being contested (or if the Indemnitee controls such contest and decides to pursue such contest by paying the Tax and seeking a refund thereof), and notwithstanding Lessee chooses to contest such Tax or to direct the Indemnitee to contest such Tax in accordance with this Section, then Lessee shall provide the Indemnitee with the funds to pay such Tax, such provision of funds to be deemed a non-interest bearing loan by Lessee to the Indemnitee to be repaid by any recovery of such Tax from such contest and remaining unpaid amount not recovered to offset Lessee's obligation to indemnify the Indemnitee for such Tax. Lessee shall indemnify the Indemnitee on an After-Tax Basis in accordance with Section 7.7 for and against any adverse consequences of any such contestinterest-free loan. In the event that the Indemnitee receives a refund (or like adjustment) in respect of any Tax for which the Indemnitee has been reimbursed by Lessee, the Premises Indemnitee shall be promptly remit the amount of such refund (or like adjustment), plus any interest received thereon, to Lessee, net of all reasonable costs and expenses incurred by such Indemnitee in jeopardy or in danger of being forfeited or foreclosedconnection therewith; provided provided, however, that if the Mortgagor shall fail so to do, the Lender may, but Indemnitee shall not be required to remit any amount pursuant to this sentence in excess of the amounts previously paid by Lessee to, pay all or on behalf of, such Contested Liens and Lien Amounts and Indemnitee with respect to such Tax pursuant to this Section 7, plus any interest and penalties thereon and such other sums as may received thereon; provided, further, that Indemnitee shall not be necessary in the judgment of the Lender required to obtain the release and discharge of such liens; and remit any amount expended by the Lender in pursuant to this sentence for so doing shall be so much additional Indebtedness bearing interest at the long as a Lease Event of Default Rate until paid, has occurred and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidis continuing.
Appears in 1 contract
Contests. Notwithstanding anything If claim is made against a Tax Indemnitee for any Tax with respect to which Lessee has an obligation under this Section 9(c), Lessor shall cause Tax Indemnitee to promptly notify the contrary herein containedLessee; provided, however, that the Mortgagor failure to so notify Lessee shall not diminish Lessee's obligations to indemnify under this Section 9(c). If reasonably requested by the Lessee in writing and provided no Event of Default shall have occurred and is continuing, Lessor, at the right sole expense of the Lessee, shall itself (or shall cause such Tax Indemnitee to) in good faith and diligently contest (and not settle without Lessee's written consent) or shall (or shall cause such Tax Indemnitee to) permit the Lessee, if desired by the Lessee, to contest in the name of the Lessee the validity, applicability or amount of such Tax. Lessor shall cause such Tax Indemnitee to contest, or shall permit the Lessee to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon (a) resisting payment thereof if practicable, (b) not paying the Premises or which may be or become a lien thereon same except under protest with funds advanced by Lessee on an interest-free basis, if protest is necessary and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”)proper, and no Contested Lien (c) if payments be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings; provided, however, that, in each such instance, the Lessor and such Tax Indemnitee shall constitute an Event of Default under this Mortgage, if, but only ifnot be required to undertake any contest or permit the Lessee to contest unless:
(aA) The Mortgagor Lessee shall forthwith give notice have provided Lessor and the Tax Indemnitee with an opinion of legal counsel reasonably acceptable to Lessor and the Tax Indemnitee to the effect that a reasonable basis exists to contest such claim (provided, however, that no such opinion shall be necessary in order to contest such claim in meetings with auditors, revenue agents, or in other informal meetings with staff members of the applicable tax authority) and, prior to the commencement of any Contested Lien appeal of an adverse judicial decision, with an opinion of such legal counsel to the Lender at the time the same effect that a reasonable basis exists to appeal such adverse judicial decision (which opinions shall be asserted;obtained at Lessee's sole cost and expense); [Amended and Restated Lease Agreement]
(bB) The Mortgagor shall either pay such proceedings, in the sole reasonable discretion of Lessor and the Tax Indemnitee, do not involve any material risk or danger of the sale, forfeiture or loss of the Aircraft or any part thereof or interest therein or the imposition of criminal penalties or sanctions against Lessor or such Tax Indemnitee or the creation of any Lien other than a Lien for Taxes not yet due or being, contested in good faith by appropriate proceedings, and for payment of which such reserves if any, as are required to be provided under protest generally accepted accounting principles have been made unless Lessee has provided to the Tax Indemnitee a bond or deposit with other security reasonably satisfactory to the Lender the full amount Tax Indemnitee (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu the case of criminal penalties or sanctions such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may other security shall be satisfactory to the LenderTax Indemnitee in its sole discretion) to protect against such risk or danger;
(cC) The Mortgagor shall diligently prosecute 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 9(c) by the highest court to which an appeal could be taken (other than the U.S. Supreme Court), 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 the Tax Indemnitee shall have received an opinion of independent tax counsel selected by the Lessee and reasonably acceptable to the Tax Indemnitee, which opinion shall be obtained at the Lessee's sole expense, to the effect that, as a result of such change, it is more likely than not that the position which the Tax Indemnitee or the Lessee, as the case may be, had asserted in such previous contest would prevail.
(D) no Event of Default shall have occurred and be continuing,
(E) prior to the commencement of any Contested Lien contest undertaken by appropriate legal proceedings having the effect Lessee or any contest undertaken by any Tax Indemnitee, the Lessee shall have delivered to such Tax Indemnitee a written acknowledgment of staying the foreclosure or forfeiture of the Premises, its obligation to indemnify fully Lessor and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Tax Indemnitee to the extent that any the contest is not successful;
(F) if such Contested Lien contest is to be initiated by the payment of, and the claiming of a refund for, such Tax, Lessee shall be determined adverse have advanced to the MortgagorTax Indemnitee sufficient funds (on an interest-free basis) to make such payments, or (ii) forthwith upon demand by the Lender ifprovided, in the opinion of the Lenderhowever, and notwithstanding that Lessee shall indemnify such Tax Indemnitee for any adverse tax consequences resulting from such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but advance. Lessee shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may deemed to be necessary in the judgment default under any of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) above indemnification provisions of this Section 9(c) so long as Lessee shall diligently prosecute a contest in conformity with the requirements of this Section 9(c)(vi), or in the case where the Lessor or a Tax Indemnitee shall be prosecuting such contest pursuant to [Amended and may demand Restated Lease Agreement] this Section 9(c)(vi), Lessee has fulfilled all of its obligations under this Section 9(c)(vi) with respect to such contest. Notwithstanding the foregoing, if a claim is made against a Tax Indemnitee which, if successful, would result in a Tax under circumstances which would require the Lessee to indemnify such Tax Indemnitee, such Tax Indemnitee shall be released from its responsibility to contest such claim, or part thereof, if it agrees in writing with Lessee not to seek indemnification from Lessee in respect of the claim, or such part thereof to be contested. In the event a Tax Indemnitee fails diligently to contest, or refuses to permit the Lessee to contest, a claim or part thereof which such Tax Indemnitee has the obligation to contest or to permit Lessee to contest under this Section 9(c), then Lessee shall not be obligated to indemnify such Tax Indemnitee for such claim or such part thereof and such Tax Indemnitee shall refund to Lessee any amounts paid or advanced by Lessee in connection with such Tax that were the subject of such claim (plus interest from the date payment upon any bond or title indemnity furnished as aforesaidis due at the rate established for refunds by the authority imposing such Tax); provided, however, that this sentence shall not apply where a Tax Indemnitee permits the Lessee to contest and the Lessee falls to diligently contest.
Appears in 1 contract
Samples: Lease Agreement (Turn Works Acquisition Iii Sub a Inc)
Contests. An Indemnitee shall forward to Lessee any notice such Indemnitee receives from any Person in regard to a proposed imposition or adjustment by any Governmental Authority that would result in a liability for Taxes with respect to which Lessee has liability under this Article 21 promptly after receipt by such Indemnitee; provided, however, that failure to do so shall not eliminate any liability by Lessee to an Indemnitee under this Article 21 except to the extent of additional interest, penalties and the like attributable to such failure or if such failure effectively precludes the ability to conduct a contest of such Taxes. Such Indemnitee shall consult with Lessee in determining whether to contest such proposed adjustment and the manner of proceeding with such contest (including whether and to what extent to allow Lessee to control the contest and to conduct the contest in its name if permissible under applicable Law or in the name of such Indemnitee); provided, however, that (a) such Indemnitee reserves the right to agree or not to agree to pursue any such contest, (b) Lessee shall keep such Indemnitee informed of the status of the contest and consult with such Indemnitee regarding the manner in which to proceed with such contest, and (c) such Indemnitee reserves the right to agree to any compromise or settlement proposal. Notwithstanding anything to the contrary herein containedcontained in this Section 21.5, the Mortgagor such Indemnitee shall have the right not be obligated to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become pursue a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon claim unless (i) prior to taking such action Lessee shall have agreed to pay or, in the case of item (C) below, lend on an interest-free basis, to such Indemnitee an amount equal to all out-of-pocket costs and expenses such Indemnitee actually incurs in connection with and reasonably allocable to contesting such claim, including, without limitation, (A) all reasonable legal, accountants’, and investigatory fees and disbursements, (B) the amount of any interest or penalty payable as a result of contesting such claim, and (C) if such contest is to be initiated by the payment of, and the claiming of a refund for, Taxes, sufficient funds to make such payment (and in the extent that any event such Contested Lien contest is finally determined adversely, the amount of such loan shall be determined adverse applied against Lessee’s obligation to indemnify such Indemnitee for the MortgagorTaxes which relate to such contest), or (ii) forthwith upon demand by the Lender if, in the opinion such proceedings do not involve any material risk or danger of the Lendersale, forfeiture, or loss of any Item of Equipment, or, if there is such a risk, Lessee has provided to such Indemnitee a bond in form and notwithstanding substance reasonably satisfactory to such Indemnitee in an amount sufficient to protect such Indemnitee from any detriment that would be suffered by such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosedIndemnitee as a result Xxxxxxxxxx XX-600-2C10; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.MSN 10070
Appears in 1 contract
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify the Lessee. The Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Lessee desires to, assume and control the Mortgagor defense thereof; provided, however, that the Lessee shall have acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, provided further, that the Lessee shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of civil liability in excess of $1,000,000 on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Encumbrance) on any Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessee stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender ifLessee in accordance with the foregoing. Each Tax Indemnitee shall at the Lessee's expense supply the Lessee with such information and documents in such Tax Indemnitee's possession as are reasonably requested by the Lessee and are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 7.4. Unless an Event of Default shall have occurred and be continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent of the Lessee, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 with respect to such Claim. Notwithstanding anything contained herein to the contrary, (a) a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 7.4 with respect to such claim (and any related claim with respect to other taxable years the contest of which is precluded as a result of such waiver) and (b) no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless there has been a change in law which in the opinion of Tax Indemnitee's counsel creates substantial authority for the Lender, and notwithstanding any success of such contest, . Each Tax Indemnitee and the Premises Lessee shall be consult in jeopardy or in danger of being forfeited or foreclosed; provided that if good faith with each other regarding the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge conduct of such liens; and any amount expended contest controlled by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaideither.
Appears in 1 contract
Samples: Master Agreement (Aaron Rents Inc)
Contests. Notwithstanding anything (i) Each of Buyer and the Company shall promptly notify the other in writing upon receipt of written notice of any pending or threatened audit, notice of deficiency, examination, assessment or any other administrative or judicial proceeding (“Audit”) which may affect any Tax liability for which the other may be liable pursuant to the contrary herein contained, the Mortgagor this Section 4.11.
(ii) The Company shall have the sole and absolute right to contest by appropriate legal proceedings diligently prosecuted (i) conduct any Taxes imposed Audit that relates to (A) any PHH Group Tax Return or assessed upon (B) any Buyer Tax Return for a complete taxable period ending on or before the Premises or which Closing Date, (ii) employ counsel of its choice in connection therewith and (iii) settle any such Audit on such terms as it may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contestdetermine; provided that in lieu the Company shall not settle any such Audit without the prior written consent of Buyer, which consent shall not be unreasonably withheld, delayed or conditioned, if such payment settlement would reasonably be expected to adversely affect Buyer. If the Mortgagor may furnish Company elects not to the Lender a bond or title indemnity in conduct any such amount and formAudit, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
then (ci) The Mortgagor Buyer (A) shall diligently prosecute such Audit in good faith, (B) shall, upon reasonable request, keep the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture Company reasonably informed of the Premises, status of developments with respect to such Audit and (C) shall permit the Lender to be represented in not settle or concede any such contest and shall pay all expenses incurred, in so doing, including fees and expenses Audit without the prior written consent of the Lender’s counsel Company (all of which consent shall constitute so much additional Indebtedness bearing interest at the Default Rate until paidnot be unreasonably withheld, delayed or conditioned) and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand any reasonable third-party costs and expenses incurred by Buyer shall be reimbursed by the Lender ifCompany. For the avoidance of doubt, reasonable third-party costs and expenses shall include the fees of outside counsel and/or accountants engaged by Buyer in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.connection with an Audit described under this
Appears in 1 contract
Samples: Stock Purchase Agreement (PHH Corp)
Contests. Notwithstanding anything If the Owner Participant receives written notice of a claim by the IRS which, if sustained, together with the amounts required to be paid if such a claim were made and sustained with respect to the contrary herein containedOther Undivided Interest, would result in a Tax Loss requiring the Mortgagor payment of an indemnity by EME in excess of $100,000, then the Owner Participant shall have notify EME of such claim within 10 days after receipt of such notice from the right IRS and take such action in contesting such claim as EME shall request from time to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon time, including appeals (but not to the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”U.S. Supreme Court), and no Contested Lien shall constitute an provided that:
(i) No Lease Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall have occurred and be assertedcontinuing;
(bii) The Mortgagor the Owner Participant shall either pay under protest or deposit with have received a written opinion of independent tax counsel, selected by the Lender the full amount (the “Lien Amount”) of such Contested LienOwner Participant and reasonably satisfactory to EME, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender effect that, with respect to any initial contest there is a bond or title indemnity Reasonable Basis for such contest (or, in the case of a judicial appeal, such amount and form, and issued by a bond or title insuring company, as may be satisfactory an opinion to the Lender;effect that there is Substantial Authority for the taxpayer’s position); and
(ciii) The Mortgagor EME shall diligently prosecute have agreed to pay, on an After-Tax Basis, all costs and expenses incurred by the contest of Owner Participant in connection with any Contested Lien by appropriate contest, including, without limitation, all reasonable legal proceedings having the effect of staying the foreclosure or forfeiture of the Premisesand other documented out-of-pocket expenses, and shall permit have provided the Lender Owner Participant with adequate assurances for the payment thereof. Subject to be represented the foregoing, the Owner Participant may forego any and all administrative appeals, proceedings, hearings and conferences with the IRS in respect of any claim and may, at its sole option, contest the claim in any permissible forum selected by the Owner Participant. The Owner Participant may, at its sole option, either pay the tax claimed and xxx for a refund or contest the claim in any permissible forum, considering in good faith, however, such contest requests as EME and its counsel shall make concerning the most appropriate forum in which to proceed and other relevant matters. If the Owner Participant chooses to pay all expenses incurredthe tax claimed and xxx for a refund, in so doingEME shall advance to the Owner Participant, including fees on an interest-free basis and expenses of with no additional net after-tax cost to the Lender’s counsel Owner Participant, sufficient funds to pay the tax and interest, penalties and additions to tax payable with respect thereto (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent such amount is indemnified against by EME). The Owner Participant shall not settle any claim without EME’s consent; provided, that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but Owner Participant shall not be required toto contest any proposed adjustment and may settle any such proposed adjustment if the Owner Participant shall waive its right to indemnity with respect to such adjustment and any future adjustments relating to the same issue or issues for which EME’s right to contest shall have been effectively precluded by the failure to contest, and shall pay to EME any amount previously paid or advanced by EME with respect to such adjustment or the contest of such adjustment (other than amounts paid or advanced pursuant to EME’s obligation to pay the costs of the contest). The Owner Participant (i) shall not make payment of any claim for at least 30 days after giving written notice of such claim to EME if such forbearance is permitted by law and shall inform EME in reasonable detail of the nature and extent of and purported basis (to the extent of the Owner Participant’s knowledge thereof) for such claim, (ii) shall consult with and consider in good faith EME’s suggestions regarding the conduct of such contest (but the manner in which such contest is conducted shall be determined in all respects by the Owner Participant in its sole discretion) and shall keep EME reasonably informed as to the progress of such contest, and (iii) shall provide EME and its counsel with copies of any correspondence (or excerpts thereof relating to the adjustment or the contest of such adjustment) or excerpts of other written material received by the Owner Participant in connection with the contest and to review and make suggestions on all submissions to the IRS and to any court to the extent such documents and submissions relate to the Tax Loss (it being understood that EME shall not be permitted to review any portions of such documents or submissions unrelated to the transactions contemplated by the Operative Documents); provided, however, that in no circumstances shall EME be entitled to review any federal income tax returns of the Owner Participant or any of its Affiliates, EME and its counsel shall maintain confidentiality with respect to all such Contested Liens information. If EME shall have requested the Owner Participant to contest such claim as above provided and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in shall have duly complied with all the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) terms of this Section 8, EME’s liability for indemnification under Section 6 shall, at EME’s election, be deferred until a Final Determination of the liability of the Owner Participant. At such time, EME shall become obligated for the payment of any indemnification hereunder resulting from the outcome of such contest, and may demand payment upon the Owner Participant shall become obligated to refund to EME any bond or title indemnity furnished as aforesaid.amount received as
Appears in 1 contract
Contests. If the Owner Participant receives written notice of a claim by the IRS which, if sustained, together with the amounts required to be paid if such a claim were made and sustained with respect to the Other Undivided Interest, would result in a Tax Loss requiring the payment of an indemnity by EME in excess of $100,000, then the Owner Participant shall notify EME of such claim within 10 days after receipt of such notice from the IRS and take such action in contesting such claim as EME shall request from time to time, including appeals (but not to the U.S. Supreme Court), provided that:
(i) No Lease Event of Default shall have occurred and be continuing;
(ii) the Owner Participant shall have received a written opinion of independent tax counsel, selected by the Owner Participant and reasonably satisfactory to EME, to the effect that, with respect to any initial contest there is a Reasonable Basis for such contest (or, in the case of a judicial appeal, such an opinion to the effect that there is Substantial Authority for the taxpayer’s position); and
(iii) EME shall have agreed to pay, on an After-Tax Basis, all costs and expenses incurred by the Owner Participant in connection with any contest, including, without limitation, all reasonable legal and other documented out-of-pocket expenses, and shall have provided the Owner Participant with adequate assurances for the payment thereof. Subject to the foregoing, the Owner Participant may forego any and all administrative appeals, proceedings, hearings and conferences with the IRS in respect of any claim and may, at its sole option, contest the claim in any permissible forum selected by the Owner Participant. The Owner Participant may, at its sole option, either pay the tax claimed and xxx for a refund or contest the claim in any permissible forum, considering in good faith, however, such requests as EME and its counsel shall make concerning the most appropriate forum in which to proceed and other relevant matters. If the Owner Participant chooses to pay the tax claimed and xxx for a refund, EME shall advance to the Owner Participant, on an interest-free basis and with no additional net after-tax cost to the Owner Participant, sufficient funds to pay the tax and interest, penalties and additions to tax payable with respect thereto (to the extent such amount is indemnified against by EME). The Owner Participant shall not settle any claim without EME’s consent; provided, that the Owner Participant shall not be required to contest any proposed adjustment and may settle any such proposed adjustment if the Owner Participant shall waive its right to indemnity with respect to such adjustment and any future adjustments relating to the same issue or issues for which EME’s right to contest shall have been effectively precluded by the failure to contest, and shall pay to EME any amount previously paid or advanced by EME with respect to such adjustment or the contest of such adjustment (other than amounts paid or advanced pursuant to EME’s obligation to pay the costs of the contest). The Owner Participant (i) shall not make payment of any claim for at least 30 days after giving written notice of such claim to EME if such forbearance is permitted by law and shall inform EME in reasonable detail of the nature and extent of and purported basis (to the extent of the Owner Participant’s knowledge thereof) for such claim, (ii) shall consult with and consider in good faith EME’s suggestions regarding the conduct of such contest (but the manner in which such contest is conducted shall be determined in all respects by the Owner Participant in its sole discretion) and shall keep EME reasonably informed as to the progress of such contest, and (iii) shall provide EME and its counsel with copies of any correspondence (or excerpts thereof relating to the adjustment or the contest of such adjustment) or excerpts of other written material received by the Owner Participant in connection with the contest and to review and make suggestions on all submissions to the IRS and to any court to the extent such documents and submissions relate to the Tax Loss (it being understood that EME shall not be permitted to review any portions of such documents or submissions unrelated to the transactions contemplated by the Operative Documents); provided, however, that in no circumstances shall EME be entitled to review any federal income tax returns of the Owner Participant or any of its Affiliates, EME and its counsel shall maintain confidentiality with respect to all such information. If EME shall have requested the Owner Participant to contest such claim as above provided and shall have duly complied with all the terms of this Section 8, EME’s liability for indemnification under Section 6 shall, at EME’s election, be deferred until a Final Determination of the liability of the Owner Participant. At such time, EME shall become obligated for the payment of any indemnification hereunder resulting from the outcome of such contest, and the Owner Participant shall become obligated to refund to EME any amount received as a refund by the Owner Participant or credited to the Owner Participant fairly attributable to advances by EME hereunder. Within fifteen (15) days following such Final Determination, any amounts due hereunder shall be paid first by set-off against each other and either (a) EME shall pay to the Owner Participant any excess of the Ml amount due hereunder over the amount of any advances previously made by EME and applied against EME’s indemnity obligation as aforesaid or (b) the Owner Participant shall repay to EME any excess of such advances over such full amount due hereunder, together with any interest received by the Owner Participant that is properly attributable to such excess amount of such advances during the period such advances were outstanding, and, if EME shall have indemnified the Owner Participant with respect to the adverse tax consequences of any advances or payments hereunder, the amount of any tax savings resulting from any payment pursuant to this sentence. Notwithstanding anything to the contrary herein containedcontained in this Section 8, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but Owner Participant shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in to contest any claim hereunder if the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing subject matter thereof shall be so much additional Indebtedness bearing interest at of a continuing nature and shall have been previously decided by a court of competent jurisdiction pursuant to the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) contest provisions of this Section 8, unless there shall have been a change in law (or interpretation thereof) or a change in facts after the date with respect to which such previous contest shall have been decided, and may demand payment upon any bond the Owner Participant shall have received, at EME’s expense, an opinion of independent tax counsel selected by the Owner Participant and reasonably acceptable to EME to the effect that as a result of the change in law (or title indemnity furnished as aforesaidinterpretation thereof) or a change in facts, there is Substantial Authority that the Owner Participant will prevail in such contest.
Appears in 1 contract
Contests. Notwithstanding anything to the contrary herein contained, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor Nothing in this Agreement shall forthwith give notice be construed to prevent UpREIT from contesting, through its Tax Matters Partner in accordance with the Partnership Agreement as part of the unified audit of the UpREIT, any claim in respect of any Contested Lien to "partnership" item of the Lender at the time the same shall be asserted;UpREIT that, if successful, would result in an Income Inclusion (a "Partnership Level Issue").
(b) The Mortgagor shall either pay If UpREIT contests a Partnership Level Issue that, if successful, would result in an Income Inclusion, UpREIT's liability for indemnification under protest or deposit with the Lender the full amount Section 4 hereof (the “Lien Amount”other than reasonable costs and expenses described in Section 6(f) of such Contested Lienthe Agreement) shall, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu at UpREIT's election, be deferred until thirty (30) days after a Final Determination of such payment the Mortgagor may furnish to the Lender a bond or title indemnity Xxxxx Indemnitee's federal income tax liability in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;respect of an Income Inclusion.
(c) The Mortgagor If any audit or proceeding involving an indemnifiable adjustment is being conducted in a proceeding involving such Xxxxx Indemnitee, which cannot be transferred to the UpREIT as a partnership item (a "Xxxxx Level Issue"), such Xxxxx Indemnitee hereby agrees (i) promptly to notify UpREIT in writing of such adjustment (and the failure of such Xxxxx Indemnitee to so notify UpREIT shall diligently prosecute preclude any indemnity hereunder to the extent UpREIT's right to effect its contest rights hereunder has been precluded by such failure), and (ii) upon UpREIT's delivery to of a written opinion of nationally recognized tax counsel reasonably acceptable to such Xxxxx Indemnitee ("Tax Counsel") to the effect that there is a Realistic Possibility of Success upon contest of any Contested Lien such Xxxxx Level Issue, such Xxxxx Indemnitee will contest that adjustment by appropriate legal proceedings filing a protest and administrative appeal and prosecuting the same in good faith; provided, however, that such Xxxxx Indemnitee will not be obligated to pursue an administrative appeal if such Xxxxx Indemnitee instead pursues relief in Tax Court or a court having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);refund jurisdiction.
(d) The Mortgagor shall pay each If, within 30 days following the failure of such Contested Lien administrative proceedings with respect to a Xxxxx Level Issue, UpREIT delivers to a Xxxxx Indemnitee a written opinion of Tax Counsel to the effect that there is a Realistic Possibility of Success if the proposed adjustment is presented to a court for resolution, then such Xxxxx Indemnitee will contest the proposed adjustment in good faith in the Tax Court or by paying the tax (and all Lien Amounts together with any applicable interest and penalties thereon penalties) and suing for refund in the Court of Federal Claims or appropriate Federal District Court. If, within 30 days following a final adverse decision of such court with respect to such Xxxxx Level Issue, UpREIT delivers to such Xxxxx Indemnitee a written opinion of Tax Counsel to the effect that it is more likely than not that such decision would be reversed on appeal, then such Xxxxx Indemnitee will appeal such decision to the appropriate Federal Court of Appeals. With respect to any of the above-described proceedings, such Xxxxx Indemnitee will keep UpREIT and its counsel informed as to the progress of such proceedings, give UpREIT and its counsel the opportunity to review and comment in advance on all written submissions and filings relevant to indemnifiable issues (after making appropriate redactions to preserve the confidentiality of the such Xxxxx Indemnitee return as to other issues), and consider in good faith any suggestions made by UpREIT or its counsel.
(e) Such Xxxxx Indemnitee shall present any settlement offer provided to such Xxxxx Indemnitee pursuant to a Xxxxx Level Issue to UpREIT. If UpREIT recommends acceptance of a settlement offer of a Xxxxx Level Issue or if the Tax Matters Partner recommends acceptance of a settlement offer in respect of a Partnership Level Issue, but such Xxxxx Indemnitee declines to accept such offer in writing within 30 days (if such Xxxxx Indemnitee does not respond within 30 days, such lack of response shall be treated as acceptance of UpREIT's or the Tax Matters Partner's recommendation, respectively), (1) the obligation of UpREIT to make indemnity payments as the result of any such contest or proceedings shall not thereafter exceed the obligation that it would have had if such contest had been settled or proceeding terminated on the basis recommended by UpREIT or the Tax Matters Partner, as applicable, and (2) in the case of a Xxxxx Level Issue, UpREIT shall have no further liability for costs or other expenses in respect of such contest.
(f) Notwithstanding the foregoing, such Xxxxx Indemnitee will have no obligation to contest any action with respect to a Xxxxx Level Issue (i) if unless such items could give rise to a federal income tax liability (disregarding other items in the assessment and considering effects in future years) in excess of $__________ , (ii) without UpREIT paying when due, reasonable third-party costs and out-of-pocket expenses including reasonable legal, witness and accounting fees and other expenses and, in the case of proceedings before the Court of Federal Claims or Federal District Court, the amount of tax (and any applicable interest and penalties) for which refund is claimed, and (iii) to the extent that any such Contested Lien shall be determined adverse Xxxxx Indemnitee waives in writing UpREIT's obligation to the Mortgagorindemnify such Xxxxx Indemnitee for such items, or in which case all third-party costs and out-of-pocket expenses described in clause (ii) forthwith upon demand thereafter incurred and all taxes would be paid by the Lender if, in the opinion of the Lender, and notwithstanding such Xxxxx Indemnitee.
(g) such Xxxxx Indemnitee shall not settle any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosedXxxxx Level Issue without UpREIT's consent; provided that if the Mortgagor shall fail so to do, the Lender may, but such Xxxxx Indemnitee shall not be required toto contest any proposed adjustment and may settle any such proposed adjustment if such Xxxxx Indemnitee shall waive its right to indemnity under this Agreement with respect to such adjustment and any Income Inclusion that results from such adjustment and, in the case of proceedings before the Court of Federal Claims or Federal District Court, shall pay all such Contested Liens to UpREIT the amount of tax (and Lien Amounts and any applicable interest and penalties thereon penalties) previously paid or advanced by UpREIT with respect to such adjustment or the contest of such adjustment under Section 6(f), plus interest at ___% computed from the time such amounts were paid or advanced by UpREIT.
(h) Within thirty (30) days after a Final Determination of the liability of such Xxxxx Indemnitee in respect of a Xxxxx Level Issue, UpREIT and each Indemnitee agree to pay each other, as applicable, the net amount of (i) the payment owed by the UpREIT to such other sums as may be necessary Xxxxx Indemnitee of any indemnification hereunder, not theretofore paid resulting from the outcome of such contest, and (ii) in the judgment case of proceedings before the Court of Federal Claims or Federal District Court, the repayment owed by such Xxxxx Indemnitee to UpREIT of the Lender amount of tax (and any applicable interest and penalties) previously paid or advanced by UpREIT with respect to obtain such adjustment or the release and discharge contest of such liens; and adjustment under Section 6(f), together with any amount expended interest received by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further or credited to such Xxxxx Indemnitee that the Lender may in is attributable to such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidadvance.
Appears in 1 contract
Samples: Tax Indemnification Agreement (Prime Group Realty Trust)
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify Concord. Concord shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that Concord desires to, assume and control the Mortgagor defense thereof; provided, however, that Concord shall have acknowledged in writing its and each Lessee’s obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, provided further, that Concord shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit sole cost and expense of Concord and such other Lessees, on behalf of Concord with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iConcord) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless a Lessee shall have posted a bond or other security reasonably satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessees which Concord and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessees or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee not indemnified by the Lessees. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if Concord shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Mortgagor, Tax Indemnitee and reasonably satisfactory to Concord stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand by the Lender if, in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the Lendereffect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and notwithstanding with its own counsel in any proceeding conducted by Concord in accordance with the foregoing. Each Tax Indemnitee shall, at the Lessees’ expense, supply Concord with such contestinformation and documents in such Tax Indemnitee’s possession as are reasonably requested by Concord and are necessary or advisable for Concord to participate in any action, suit or proceeding to the Premises extent permitted by this Section 7.4. Unless an Event of Default shall have occurred and be in jeopardy continuing, no Tax Indemnitee shall enter into any settlement or in danger other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to doConcord, the Lender may, but which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 with respect to such Claim. Notwithstanding anything contained herein to the contrary, (i) a Tax Indemnitee will not be required to, pay all to contest (and no Lessee shall be permitted to contest except on its own behalf) a claim with respect to the imposition of any Tax if such Contested Liens Tax Indemnitee shall waive its right to indemnification under this Section 7.4 with respect to such claim (and Lien Amounts and interest and penalties thereon and such any related claim with respect to other sums taxable years the contest of which is precluded as may be necessary in the judgment of the Lender to obtain the release and discharge a result of such liens; waiver) and (ii) no Tax Indemnitee shall be required to contest any amount expended claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless Concord shall have provided to such Tax Indemnitee an opinion of Tax Indemnitee’s counsel selected by the Lender Tax Indemnitee and reasonably satisfactory to Concord stating that a reasonable basis exists to contest such claim in so doing light of such adverse decision. Each Tax Indemnitee and Concord shall be so much additional Indebtedness bearing interest at consult in good faith with each other regarding the Default Rate until paid, and payable upon demand; and provided further that the Lender may in conduct of such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidcontest controlled by either.
Appears in 1 contract
Samples: Master Agreement (Concord Efs Inc)
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify the Lessee. The Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Lessee desire to, assume and control the Mortgagor defense thereof; provided, however, that the Lessee shall have acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, provided further, that the Lessee shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on the Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves any federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessee stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender ifLessee in accordance with the foregoing. Each Tax Indemnitee shall at the Lessee's expense supply the Lessee with such information and documents in such Tax Indemnitee's possession reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 7.4. Unless an Event of Default shall have occurred and be continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent of the Lessee, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 with respect to such Claim. Notwithstanding anything contained herein to the contrary, (a) a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 7.4 with respect to such claim (and any related claim with respect to other taxable years the contest of which is precluded as a result of such waiver) and (b) no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless there has been a change in law which in the opinion of Tax Indemnitee's counsel creates substantial authority for the Lender, and notwithstanding any success of such contest, . Each Tax Indemnitee and the Premises Lessee shall be consult in jeopardy or in danger of being forfeited or foreclosed; provided that if good faith with each other regarding the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge conduct of such liens; and any amount expended contest controlled by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaideither.
Appears in 1 contract
Samples: Assignment and Assumption of Lease (Fidelity National Information Services, Inc.)
Contests. Notwithstanding anything (A) If a written claim shall be made against and received by any Indemnitee for any Tax for which Borrower is obligated to indemnify pursuant to this Section 6(b), such Indemnitee shall notify Borrower in writing of such claim within 30 days after its receipt, and shall provide Borrower such information regarding such claim as Borrower may reasonably request; provided, however, that the failure to provide such notice shall not release Borrower from any of its obligations to indemnify under Section 6 hereof unless, and only to the contrary herein containedextent that, such failure effectively precludes Borrower’s contest rights. To the Mortgagor shall have the right extent permitted under applicable law, such Indemnitee will not make any payments with respect to contest such claim for at least 30 days after giving notice of such claim to Borrower.
(B) If requested by appropriate legal proceedings diligently prosecuted any Taxes imposed Borrower in writing within 30 days after its receipt of such notice or assessed upon the Premises or which such shorter period as may be required by applicable law, such Indemnitee shall, at the expense of Borrower and subject to subparagraph (C) below, contest the validity, applicability or become amount of such Taxes by, in the case of an Indemnitee-Controlled Contest, in such Indemnitee’s sole discretion or, in the case of a lien thereon Borrower-Controlled Contest, in Borrower’s sole discretion, (1) resisting payment thereof if practicable, (2) not paying such Tax except under protest, (3) if protest is necessary and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”)proper, and no Contested Lien if payment of such Tax is made, using reasonable efforts to obtain a refund thereof, in appropriate administrative and judicial proceedings, and (4) in the case of an Indemnitee-Controlled Contest, considering in good faith any other reasonable action as Borrower may reasonably request. Each Indemnitee shall constitute an Event consult in good faith with Borrower and Borrower’s counsel, and Borrower shall consult in good faith with such Indemnitee and its counsel in the case of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien a Borrower-Controlled Contest. concerning the forum in which the contest is most likely to the Lender at the time the same be favorably resolved and whether such contest shall be asserted;
by (bx) The Mortgagor shall either pay resisting payment of such Tax, (y) paying such Tax under protest or deposit with (z) paying such Tax and seeking a refund or other repayment thereof.
(C) In no event shall an Indemnitee be required, or Borrower permitted, to contest the Lender the full amount imposition of any Tax for which Borrower is obligated pursuant to this Section 6(b) unless (the “Lien Amount”1) Borrower shall have agreed to pay and shall promptly be paying on request all reasonable costs and expenses that such Indemnitee incurs in contesting such claim or arising out of or relating to such Contested Liencontest (including legal fees, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and formaccounting fees, and issued disbursements, including those on appeal, if any); (2) such contest is not reasonably likely to result in a material danger of the sale, seizure, forfeiture or loss of the Aircraft, or the creation of any Lien thereon other than Liens for Taxes (i) either not yet due or being contested in good faith by a bond or title insuring companyappropriate proceedings and (ii) for which such reserves, if any, as may are required to be satisfactory to provided under generally accepted accounting principles have been provided by Borrower, and there is no risk of criminal penalties; (3) if such contest shall be conducted in a manner requiring the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture payment of the Premisesclaim, Borrower shall have advanced sufficient funds, on an interest-free basis, to make the payment required, and shall permit have agreed to indemnify the Lender Indemnitee against any additional net after-Tax cost to be represented such Indemnitee of such advance; (4) if requested by the Indemnitee in any writing, such contest Indemnitee shall have received an opinion of independent Tax counsel selected by Borrower and shall pay all expenses incurredreasonably acceptable to such Indemnitee and furnished at Borrower’s sole expense to the effect that a Realistic Possibility of Success exists for contesting such claim (or, in so doingthe case of an appeal of an adverse judicial determination, including fees and expenses a written opinion from such independent Tax counsel to the effect that it is more likely than not that such adverse judicial determination will be reversed or substantially modified); (5) Borrower shall have delivered to such Indemnitee a written acknowledgment of the LenderBorrower’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each obligation to indemnify such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that the contest is not successful; provided, however, that Borrower will not be bound by its acknowledgment of liability if the contest is resolved on a clear and unambiguous basis showing no such liability under this Section 6(b) with respect to such Tax; (6) if a Specified Default or Event of Default shall have occurred and be continuing, Borrower shall have provided security for its obligation hereunder satisfactory to the Indemnitee by placing in escrow sufficient funds to cover any such Contested Lien shall contested Tax and the reasonably expected expenses of such contest on an After-Tax Basis, or otherwise providing satisfactory provisions for payment of such amounts determined by the Indemnitee in its sole discretion; (7) the aggregate amount of all indemnity payments that Borrower may be determined adverse required to make to such Indemnitee with respect to such claim (or similar or related claims) is at least $60,000; and (8) the claim is not for a Tax the imposition of which has been previously contested by, or at the request of, Borrower hereunder, and such previous contest (including all allowable appeals) was decided adversely to Borrower, unless Borrower has delivered an opinion of independent Tax counsel selected by Borrower and reasonably acceptable to the MortgagorIndemnitee to the effect that, on the basis of (i) a change in applicable law, or (ii) forthwith upon demand by the Lender if, a difference in the opinion underlying facts, there is currently a Realistic Possibility of Success for contesting such claim.
(D) If any Indemnitee shall obtain a refund of all or any part of any Tax paid by Borrower, such Indemnitee shall pay Borrower, but not before Borrower shall have made all payments theretofore due to such Indemnitee pursuant to this Section 6(b) and any other payments theretofore due such Indemnitee under any of the LenderOperative Documents, an amount equal to the amount of such refund (net of any Taxes imposed thereon), including interest received and attributable thereto (net of any Taxes imposed thereon) plus, if Borrower has paid an amount pursuant to the first sentence of Section 6(b)(iii)(A), any net Tax benefit (or minus any net Tax detriment) realized by such Indemnitee as a result of any refund received, and notwithstanding any payment made, by such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosedIndemnitee pursuant to this sentence; provided that if the Mortgagor shall fail so to do, the Lender may, but Indemnitee shall not be required toobligated to pay an amount under the preceding sentence to the extent that such amount would exceed the amount of such Taxes paid, pay all reimbursed or advanced by Borrower to such Contested Liens and Lien Amounts and interest and penalties thereon and such Indemnitee (other sums as than the cost of the contest thereof); provided, further, that any amount not paid to Borrower pursuant to the foregoing limitation shall be carried forward to reduce pro tanto any future payments that Borrower may be necessary in required to make to such Indemnitee pursuant to this Section 6(b). If any Indemnitee shall have paid Borrower any refund of all or part of any Tax paid by Borrower and it is subsequently determined that such Indemnitee was not entitled to the judgment of the Lender to obtain the release and discharge of refund, such liens; and any amount expended by the Lender in so doing determination shall be so much additional Indebtedness bearing interest at treated as the Default Rate until paid, and payable upon demand; and provided further that imposition of a Tax for which Borrower is obligated to indemnify such Indemnitee pursuant to the Lender may in such case use and apply monies deposited as provided in paragraph (b) provisions of this Section 6(b) without regard to the exclusions set forth in Section 6(b)(ii) (other than subparagraphs (4), (11) and (12) thereof). Provided no Specified Default or Event of Default has occurred and is continuing, an Indemnitee shall not settle any such claim or contest pursuant to this provision without the written consent of Borrower, which consent shall not be unreasonably withheld, conditioned or delayed; provided, that an Indemnitee may demand settle at any time without the consent of Borrower if the Indemnitee waives (by written notice to Borrower) the payment upon by Borrower of an indemnity in respect of such issue and any bond related issue the contest of which is effectively foreclosed by the settlement of such issue, including any payment arising from such issue in subsequent years or title indemnity furnished as aforesaidwhich by reason of the fact that such issue is of a continuing nature, and promptly pays to Borrower any Tax previously paid or any interest-free loan advanced by Borrower (other than expenses of such contests) with respect to such issue.
(E) Nothing contained in this Section 6(b)(iv) shall require any Indemnitee to contest, or permit Borrower to contest in the name of such Indemnitee, a claim that such Indemnitee would otherwise be required to contest pursuant to this Section 6(b)(iv) if such Indemnitee shall waive payment by Borrower of any amount that might otherwise be payable by Borrower under this Section 6(b) in connection with such claim (other than the costs of contest previously incurred), nor shall any Indemnitee be required to pursue any appeal to the United States Supreme Court.
Appears in 1 contract
Samples: Loan Agreement (Skywest Inc)
Contests. Notwithstanding anything (i) If any claim is made against an Indemnified Person with respect to Taxes for which Lessee could have an indemnity obligation hereunder, such Indemnified Person shall promptly notify Lessee in writing of such claim, and shall contest in good faith (including consultations in-good faith with Lessee and Lessee's counsel) with the contrary herein contained, the Mortgagor shall have the right to contest appropriate public authority and by appropriate legal proceedings diligently prosecuted in the name of the relevant Indemnified Person, and shall not settle without the prior written consent of Lessee, the amount or validity of any Taxes imposed payable by Lessee under the terms of this Agreement, provided that (A) Lessee shall have requested that such Indemnified Person pursue such contest, (B) if such contest requires the payment of the claim, Lessee shall have paid the amount required directly to the appropriate taxing authority or assessed upon made an advance of the Premises or which may be or become amount thereof to such Indemnified Person on an interest-free basis and net of any additional tax cost (after taking into account any tax benefits) to such Indemnified Person resulting from such advance, (C) if Lessee requests that an Indemnified Person pursue a lien thereon contest that necessarily involves net income taxes, Lessee shall have provided an opinion of independent tax counsel, selected by Lessee and any mechanics’reasonably acceptable to Lessor, materialmen’s or other liens or claims to the effect that there is a. reasonable basis for lien upon pursuing such contest, (D) such contest would not result in a material risk of forfeiture of the Premises (each, a “Contested Lien”)relevant Aircraft, and (E) no Contested Lien shall constitute an Event of Default with respect to the applicable Aircraft shall have occurred and be continuing, unless, in the case of (D) and (E), Lessee shall have provided security that, in the reasonable discretion of all Indemnified Persons, is sufficient to protect the Aircraft and Lessee's obligations hereunder without recourse to any other assets; and provided further, that Lessee shall pay for all costs, expenses and liabilities incurred in connection with any such contest to the extent such costs, expenses and liabilities relate to a Tax that Lessee shall have requested be contested in accordance with this Section 11(d). The Indemnified Person conducting such contest shall keep Lessee and its counsel informed of the progress and status of such contest. Alternatively, if (1) such contest involves (or could legally involve) only Taxes (other than net income Taxes) for which Lessee could have an indemnity obligation hereunder and (2) for which Lessee would be legally permitted to conduct such contest in its own name under the law of the applicable taxing jurisdiction, Lessee shall be permitted to contest the claim, subject to the conditions set forth in clauses (A), (B), (C), (D) and (E) above, and to control the contest of such claim, including the choice of forum, provided that (y) Lessee shall notify and advise such Indemnified Person of the progress and status of such contest and shall consider in good faith the recommendations of such Indemnified Person with respect to any such contest undertaken in such Indemnified Person's name, and (z) such Indemnified Person agrees to provide Lessee with the authorizations needed by Lessee to pursue such contest, and shall provide Lessee with all information in the possession of such Indemnified Person that is reasonably requested by Lessee for the pursuit of such contest. Notwithstanding the foregoing, Lessee shall be permitted to contest a Tax in the name of an Indemnified Party if (i) all the other conditions except clause (2) of the preceding sentence are met, (ii) the contest in question involves an Aircraft subject to a Permitted Sublease entered into after the date hereof under the terms of which Lessee has allowed the sublessee, as indemnitor under such sublease, to contest the indemnified Tax in Lessee's name and (iii) Lessee, as a general matter in leasing transactions it has entered into after the date hereof in which Lessee is the lessor, has granted similar rights to lessees in such transactions. Notwithstanding the foregoing provisions of this paragraph (i), an Indemnified Person may forego its obligation to contest a claim for Taxes if it notifies Lessee in writing that it waives its rights under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice Section 11 with respect to such claim and any claim based on the outcome of any Contested Lien to the Lender at the time the same such claim. A Permitted Sublessee shall be asserted;
(bpermitted to exercise Lessee's rights and obligations under this Section 11(d) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of respect to a contest; provided that Lessee shall have notified Lessor in lieu writing of its intention to have a Permitted Sublessee exercise such payment the Mortgagor may furnish rights and obligations prior to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent time that any action is taken by such Contested Lien Permitted Sublessee with respect to such contest; and provided, further, that Lessee shall be determined adverse to the Mortgagor, or at all times remain liable for its obligations under this Section 11.
(ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises Lessee shall be in jeopardy entitled to any refunds of Taxes, plus interest thereon, which are actually received by any Indemnified Person or in danger Lessee which are with respect to Taxes previously paid by (or as to which an indemnity payment has been made by) Lessee under the terms of being forfeited or foreclosedthis Agreement; provided that if (A) no Payment Event of Default shall have occurred and be continuing, and (B) the Mortgagor shall fail so subsequent loss of any such refund for which an Indemnified Person has made a payment to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing Lessee shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited treated as provided in paragraph (b) of an indemnified Tax under this Section and may demand payment upon any bond or title indemnity furnished as aforesaid11.
Appears in 1 contract
Contests. Notwithstanding anything After the Closing Date, Parent shall promptly notify the Representative of the receipt of any written notice by the Surviving Corporation, Parent or any of Parent’s affiliates which involves the assertion of any claim, or the commencement of any Action, in respect of which an indemnity may be sought by Parent pursuant to Article VIII (a “Tax Claim”); provided, that failure to comply with this provision shall not affect Parent’s right to indemnification hereunder, except to the contrary herein containedextent the Sellers shall have been materially prejudiced by such failure. The Representative shall be entitled (at the Sellers’ expense) to participate and, at its option, take control of the defense of any pending or threatened Tax Claim, in whole or in part (including any resulting litigation), and to employ counsel of its choice at its expense. If the Representative elects to assume the defense of a Tax Claim, the Mortgagor Representative shall have keep Parent reasonably informed of all material developments relating to such Tax Claim, and shall allow Parent sufficient notice and opportunity to participate in the Tax Claim to the extent of any claims for Taxes for which Parent (or the Company or any Subsidiary) may be liable. Neither Parent nor the Representative shall settle or compromise (or cause to be settled or compromised) a matter involving a claim for Taxes for which the other party may be liable under this Agreement without the prior written consent of such other party, which consent shall not be unreasonably delayed, conditioned or withheld, unless Parent or the Representative, as the case may be, waives the right to contest be indemnified for the issue being conceded or settled. To the extent the Representative elects to control a Tax Claim pursuant to this Section 7.3, the Representative shall use (and shall cause the Sellers and their affiliates to use) its commercially reasonable efforts to separate from any such Tax Claim any item in respect of which an indemnity is not sought by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”)Parent pursuant to Article VIII, and no Contested Lien shall constitute an Event of Default under this Mortgageto permit, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Liengreatest extent possible, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish Parent to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute control the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaiditem.
Appears in 1 contract
Samples: Merger Agreement (Ennis, Inc.)
Contests. Notwithstanding anything If written claim is made against an Indemnitee for Taxes with respect to which Lessee is or may be liable for a payment or indemnity hereunder, such Indemnitee will promptly give Lessee notice in writing of such claim; provided, however, that such Indemnitee's failure to give notice will not relieve Lessee of its obligations hereunder, except to the contrary herein contained, extent the Mortgagor shall have failure to give such notice precludes a contest of such claim in the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
manner contemplated herein. So long as (a) The Mortgagor shall forthwith give notice a contest of such Taxes does not involve any Contested Lien to danger of the Lender at sale, forfeiture or loss of the time the same shall be asserted;
Aircraft or any interest therein, (b) The Mortgagor shall either pay under protest or deposit Lessee has provided the relevant Indemnitee with the Lender the full amount (the “Lien Amount”) an opinion of independent tax counsel acceptable to such Contested LienIndemnitee that a meritorious basis exists for contesting such claim, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor Lessee has made adequate reserves for such Taxes or, if required by the relevant Indemnitee, an adequate bond has been posted by Lessee, and (d) Lessee has acknowledged in writing its obligation to indemnify for such Taxes, then such Indemnitee at Lessee's written request will in good faith, with due diligence and at Lessee's sole cost and expense, contest (or, if permitted by Law, permit Lessee to contest in the name of such Indemnitee) the validity, applicability or amount of such Taxes. If such contest is to be initiated by the payment of, and the claiming of a refund for, any Taxes, Lessee shall diligently prosecute advance to the contest relevant Indemnitee sufficient funds (on an interest-free basis) to make such payments and shall indemnify such Indemnitee for any tax consequences resulting from such advance of funds. Although the relevant Indemnitee may consult in good faith with Lessee concerning the conduct of any Contested Lien by appropriate legal contest, such Indemnitee shall control the conduct of all proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender relating to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses which is brought by or on behalf of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest such Indemnitee. Any contest initiated hereunder may be settled or discontinued at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; time provided that if the Mortgagor relevant Indemnitee shall fail so have waived any right to do, indemnification for the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidTaxes being contested.
Appears in 1 contract
Samples: Lease Agreement (Pan Am Corp /Fl/)
Contests. Notwithstanding anything If any claim or claims is or are made against any Indemnitee for any Tax which is subject to indemnification as provided in Section 7.2(a), such Indemnitee shall as soon as practicable, but in no event more than thirty (30) days after receipt of formal written notice of the Tax or proposed Tax, notify the Lessee and shall not take action with respect to such Tax without the consent of the Lessee (such consent not to be unreasonably withheld, conditioned or delayed) for thirty (30) days after the receipt of such notice by the Lessee; provided, however, that in the case of any such Tax, if action shall be required by Applicable Law to be taken prior to the contrary herein containedend of such period of thirty (30) days, such Indemnitee shall, in such notice to the Lessee, inform the Lessee of such shorter period, and no action shall be taken with respect to such Tax without the consent of the Lessee (such consent not to be unreasonably withheld, conditioned or delayed) before seven (7) days before the end of such shorter period. If, in the good faith opinion of the Lessee there exists a reasonable basis to contest such Tax (and if the provisos of the definition of “Permitted Contest” continue to be satisfied), the Mortgagor Lessee at its expense may, to the extent permitted by Applicable Laws and provided that it has acknowledged in writing its liability for the Tax at issue if the contest is not successful, contest such Tax, and subsequently may appeal any adverse determination (other than to the United States Supreme Court), in the appropriate administrative and legal forums; provided, that in all other circumstances, upon notice from the Lessee to such Indemnitee that there exists a reasonable basis to contest any such Tax or, in the case of an appeal of adverse judicial determination, the position asserted in such appeal will more likely than not prevail (in each case, as supported by an opinion of tax counsel to the Lessee reasonably acceptable to the Indemnitee), the Indemnitee, at the Lessee’s expense, shall contest any such Tax (so long as the provisos of the definition of “Permitted Contest” continue to be satisfied and, in the case of a Tax on gross or net income, the aggregate amount of the Tax exceeds $50,000, which amount shall be verified and certified by an independent public accounting firm mutually acceptable to the Lessee and the applicable Indemnitee in accordance with Section 7.2(a)(v). The Lessee shall pay all out-of-pocket expenses incurred by the Indemnitee in contesting any such Tax (including, without limitation, all reasonable attorney’s and accountants’ fees and expenses), upon demand by the Indemnitee. The Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that any such Contested Lien participation by the Lessee does not interfere with the Indemnitee’s control of such contest and the Lessee shall in all events be determined adverse kept informed, to the Mortgagorextent practicable, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any material developments relative to such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.BUSINESS.29620189.12
Appears in 1 contract
Contests. Notwithstanding anything Lessee shall pay on or before the time or times prescribed by law any Taxes that the Lessee is liable for hereunder (except any Taxes excluded by the proviso to Section 7.2(a)). If any claim or claims is or are made against any Indemnitee for any Tax which is subject to indemnification as provided in Section 7.2(a), Indemnitee shall as soon as practicable, but in no event more than 30 days after receipt of formal written notice of the Tax or proposed Tax, notify Lessee and if, in the reasonable opinion of Lessee and (in the case of any Tax on gross or net income which may reasonably be expected to exceed $100,000 in the aggregate) tax counsel reasonably acceptable to the contrary herein containedIndemnitee, there exists a reasonable basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and 66 if the provisos of the definition of "Permitted Contest" continue to be satisfied and so long as no Lease Event of Default exists), Lessee at its expense may, to the extent permitted by Applicable Laws and Regulations and provided that it has acknowledged in writing its liability for the Tax at issue if the contest is not successful, contest such Tax, and subsequently may appeal any adverse determination (other than to the United States Supreme Court), in the appropriate administrative and legal forums; provided, that in all other circumstances, upon notice from Lessee to such Indemnitee that there exists a reasonable basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to Lessee reasonably acceptable to the Indemnitee), the Mortgagor Indemnitee, at Lessee's expense, shall contest any such Tax (so long as the provisos of the definition of "Permitted Contest" continue to be satisfied and so long as no Lease Event of Default exists and, in the case of a Tax on gross or net income, the amount of the Tax exceeds $100,000). Lessee shall pay all expenses incurred by the Indemnitee in contesting any such Tax (including, without limitation, all reasonable attorneys' and accountants' fees), upon demand by the Indemnitee. Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that such participation by such Person does not interfere with the Indemnitee's control of such contest and Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitee shall have the right to participate in the conduct of any proceedings controlled by Lessee to the extent that such participation by such Person does not interfere with Lessee's control of such contest, and the Indemnitee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim for which Lessee would be required to make a reimbursement payment hereunder will not be settled or compromised without Lessee's prior written consent unless the provisos of the definition of "Permitted Contest" would not continue to be satisfied or the Indemnitee waives its right to indemnification hereunder and repays the Taxes advanced by the Lessee as a non-interest bearing loan by the Lessee to such Indemnitee (as provided below) with interest at the Overdue Rate from the date of payment until receipt thereof by the Lessee. Indemnitee shall endeavor to settle or compromise any such Contested Lien shall be determined adverse contested claim in accordance with written instructions received from Lessee; provided, that (x) Lessee on or before the date the Indemnitee executes a settlement or compromise pays the contested Tax to the Mortgagor, extent agreed upon or makes an indemnification payment to the Indemnitee in an amount acceptable to the Indemnitee; and (iiy) forthwith upon demand by the Lender ifsettlement or compromise does not, in the reasonable opinion of the LenderIndemnitee materially adversely affect the right of the Certificate Trustee or such Indemnitee to receive Rent or the Lease Balance or any other payment pursuant to the Operative Documents, or involve a material risk of sale, forfeiture or loss of the Premises or any interest therein or any matter described in the provisos to the definition of "Permitted Contest". The failure of an Indemnitee to contest timely a claim against it for any Tax which is subject to indemnification under Section 7.2(a) and for which it has an obligation to Lessee to contest under this Section 7.2(b) in the manner required by Applicable Laws and Regulations where Lessee has timely requested that such Indemnitee contest such claim shall relieve Lessee of its obligations to such Indemnitee under Section 7.2(a) with respect to such claim only to the extent such failure results in the loss of an effective contest. If Applicable Laws and Regulations require the payment of a contested Tax as a condition to, or regardless of, its being contested, and notwithstanding Lessee chooses to contest such Tax or to direct the Indemnitee to contest such Tax in accordance with this Section, then Lessee shall provide the Indemnitee with the funds to pay such Tax, such provision of funds to be deemed a non-interest bearing loan by Lessee to the Indemnitee to be repaid by any recovery of such Tax from such contest and any remaining unpaid amount not recovered to offset Lessee's obligation to indemnify the Indemnitee for such Tax. Lessee shall indemnify the Indemnitee on a Grossed-Up Basis in accordance with Section 7.6 for and against any adverse consequences of any such contestinterest-free loan. In the event that the Indemnitee receives a refund (or like adjustment) in respect of any Tax for which the Indemnitee has been reimbursed by Lessee, the Premises Indemnitee shall be in jeopardy promptly remit the amount of such refund (or in danger like adjustment), plus any interest received thereon, to Lessee, net of being forfeited or foreclosedall costs and expenses incurred by such Indemnitee; provided provided, however, that if the Mortgagor shall fail so to do, the Lender may, but Indemnitee shall not be required to remit any amount pursuant to this sentence in excess of the amounts previously paid by Lessee to, pay all or on behalf of, such Contested Liens and Lien Amounts and Indemnitee with respect to such Tax pursuant to this Article VII, plus any interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidreceived thereon.
Appears in 1 contract
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify the Lessee. The Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Lessee desires to, assume and control the Mortgagor defense thereof; provided, however, that the Lessee shall have acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action if requested to do so by the right Lessee, suit or proceeding if the contest is unsuccessful; and, provided further, that the Lessee shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessee stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender ifLessee in accordance with the foregoing. Each Tax Indemnitee shall at the Lessee's expense supply the Lessee with such information and documents in such Tax Indemnitee's possession reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 7.4. Unless an Event of Default shall have occurred and be continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent of the Lessee, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 with respect to such Claim. Notwithstanding anything contained herein to the contrary, (a) a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 7.4 with respect to such claim (and any related claim with respect to other taxable years the contest of which is precluded as a result of such waiver) and (b) no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless there has been a change in law which in the opinion of Tax Indemnitee's counsel creates substantial authority for the Lender, and notwithstanding any success of such contest, . Each Tax Indemnitee and the Premises Lessee shall be consult in jeopardy or in danger of being forfeited or foreclosed; provided that if good faith with each other regarding the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge conduct of such liens; and any amount expended contest controlled by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaideither.
Appears in 1 contract
Samples: Master Agreement (Ruby Tuesday Inc)
Contests. Notwithstanding anything Lessee Parties shall pay on or before the time or times -------- prescribed by law any Taxes (except any Taxes excluded by the proviso to Section ------- 7.2(a)); provided, however, that no Lessee Party shall be under an obligation to ------ -------- ------- pay any such Tax so long as the payment of such Tax is not delinquent or is being contested by a Permitted Contest. If any claim or claims is or are made against any Indemnitee for any Tax which is subject to indemnification as provided in Section 7.2(a), Indemnitee shall as soon as practicable, but in no -------------- event more than twenty (20) days after receipt of formal written notice of the Tax or proposed Tax, notify Lessee and if, in the reasonable opinion of Lessee and (in the case of any Tax which may reasonably be expected in the aggregate to exceed Fifty Thousand Dollars ($50,000)) tax counsel acceptable to the contrary herein containedIndemnitee, there exists a basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and if the provisos of the definition of "Permitted Contest" continues to be satisfied and so long as no Lease Event of Default exists), Lessee at its expense may, to the extent permitted by Applicable Laws and Regulations, contest such Tax, and subsequently may appeal any adverse determination, in the appropriate administrative and legal forums; provided that in all other circumstances, upon notice from Lessee to such Indemnitee that there exists a basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to Lessee acceptable to the Indemnitee), the Mortgagor Indemnitee, at Lessee's expense, shall contest any such Tax. Lessee shall pay all expenses incurred by the Indemnitee in contesting any such Tax (including all reasonable attorneys' and accountants' fees, including the allocated costs of internal counsel), upon demand by the Indemnitee. Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that such participation by such Person does not interfere with the Indemnitee's control of such contest and Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitee shall have the right to participate in the conduct of any proceedings controlled by Lessee and the Indemnitee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim for which Lessee would be required to make a reimbursement payment hereunder will not be settled or compromised without Lessee's prior written consent (which consent shall neither be unreasonably delayed nor withheld), unless the provisos of the definition of "Permitted Contest" would not continue to be satisfied. Indemnitee shall endeavor to settle or compromise any such Contested Lien shall be determined adverse contested claim in accordance with written instructions received from Lessee, provided that: (x) Lessee on or before the date the Indemnitee executes a settlement or compromise pays the contested Tax to the Mortgagor, extent agreed upon or makes an indemnification payment to the Indemnitee in an amount acceptable to the Indemnitee; and (iiy) forthwith upon demand by the Lender ifsettlement or compromise does not, in the reasonable opinion of the LenderIndemnitee materially adversely affect the right of such Lessor to receive Rent or the Lease Balance or any other payment pursuant to the Operative Documents, or involve a material risk of sale, forfeiture or loss of any Site or any interest therein or any matter described in the provisos to the definition of "Permitted Contest." The failure of an Indemnitee to timely contest a claim against it for any Tax which is subject to indemnification under Section 7.2(a) and for which it has an -------------- obligation to Lessee to contest under this Section in the manner required by Applicable Laws and Regulations where Lessee has timely requested that such Indemnitee contest such claim shall relieve Lessee of its obligations to such Indemnitee under Section 7.2(a) with respect to such claim to the extent such -------------- failure results in the loss of an effective contest. If Applicable Laws and Regulations require the payment of a contested Tax as a condition to, or regardless of, its being contested, and notwithstanding Lessee chooses to contest such Tax or to direct the Indemnitee to contest such Tax in accordance with this Section, then Lessee shall provide the Indemnitee with the funds to pay such Tax, such provision of funds to be deemed a non-interest bearing loan by Lessee to the Indemnitee to be repaid by any recovery of such contestTax from such contest and any remaining unpaid amount not recovered to offset Lessee's obligation to indemnify the Indemnitee for such Tax. Lessee shall indemnify the Indemnitee on a grossed-up basis (in accordance with Section 7.4) for and against any adverse ----------- tax consequences of such interest-free loan. In the event that the Indemnitee receives a refund (or like adjustment) in respect of any Tax for which the Indemnitee has been reimbursed by Lessee, the Premises Indemnitee shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if immediately remit the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge amount of such liens; refund (or like adjustment) to Lessee, net of all costs and any amount expended expenses incurred by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidIndemnitee.
Appears in 1 contract
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify DTD. DTD shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that DTD desires to, assume and control the Mortgagor defense thereof; provided, however, that DTD shall have acknowledged in writing its and each Lessee's obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, provided further, that DTD shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of DTD and the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessees, on behalf of DTD with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure DTD or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (ia Lessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless DTD or a Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessees which DTD and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessees or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if DTD shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Mortgagor, Tax Indemnitee and reasonably satisfactory to DTD stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand by the Lender if, in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the Lendereffect that such appeal is more likely than not to be successful, and notwithstanding any provided, however, such contest, the Premises Tax Indemnitee shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not no event be required to, pay all such Contested Liens to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and Lien Amounts and interest and penalties thereon and such other sums as may be necessary with its own counsel in any proceeding conducted by DTD in accordance with the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidforegoing.
Appears in 1 contract
Contests. Subject to the rights of insurers under policies of insurance maintained pursuant to Section 13 of the Lease, the Lessee shall have the right, at its sole cost and expense, to investigate, and the right in its sole discretion to defend or contest by appropriate proceedings or compromise, any Claim for which indemnification is sought under this Section 12.1, and the Indemnitee shall cooperate, at the Lessee's expense, with all reasonable requests of the Lessee in connection therewith, provided that the Lessee shall not have the right without the consent of the Indemnitee to defend, contest or compromise any claim with respect to such Indemnitee (i) if a Lease Event of Default shall have occurred and be continuing, (ii) if such proceeding involves any material danger of the sale, forfeiture or loss of the Undivided Interest, or (iii) if such Claim involves a realistic possibility of criminal sanctions or criminal liability to such Indemnitee, in which event the Indemnitee shall be entitled to control and assume responsibility for the defense of such Claim at the expense of the Lessee. The Lessee will not be required to acknowledge liability as a condition to exercising its contest rights hereunder unless the Lessee assumes control of such contest. With respect to any Claim, liability for which the Lessee shall have acknowledged to the relevant Indemnitee in writing, in the event that in the course of the investigation or defense of such Claim, the Lessee shall in good faith reasonably determine that it is not liable for indemnification with respect thereto, it may give notice to the applicable Indemnitee of such fact; and, in such case, any acknowledgement therefore made by the Lessee of its liability with respect to such Claim shall be deemed revoked, and the Lessee may thereupon cease to defend such Claim, provided that (i) it shall have given the Indemnitee reasonable prior notice of its intention to renounce such acknowledgment, (ii) the Lessee's conduct regarding the defense of such Claim or any decision to withdraw from such defense shall not materially prejudice or have materially prejudiced the Indemnitee's ability to contest such Claim (taking into account, among other things, the time of the Lessee's withdrawal and the theory or theories upon which the Lessee shall have based its defense), and (iii) the Lessee shall have given such Indemnitee all materials, documents and records relating to its defense of such Claim as such Indemnitee shall have reasonably requested in connection with the assumption by such Indemnitee of the defense of such Claim at the cost and expense of such Indemnitee unless it is determined that the Lessee is required to indemnify such Indemnitee for such Claim, in which case at the cost and expense of the Lessee. In the event that the Lessee shall cease to defend any Claim pursuant to the preceding sentence, the Lessee shall indemnify each Indemnitee to the extent that the actions of the Lessee in defending such Claim or the manner or time of the Lessee's election to withdraw from the defense of such Claim shall have caused such Indemnitee to incur any loss, cost, liability or expense which such Indemnitee might not have incurred had the Lessee not ceased to defend such Claim in such manner or such time; provided, however, that the Lessee shall not be required to indemnify such Indemnitee to the extent that the Lessee shall have proven (in a judicial proceeding or otherwise) that neither its manner of defending such Claim nor the manner of time of its withdrawal from the defense of such Claim caused such loss, cost, liability or expense. The Lessee will provide the Indemnitee with such information not within the control of such Indemnitee, as is in the Lessee's control or is reasonably available to the Lessee, which such Indemnitee may reasonably request and shall otherwise cooperate with such Indemnitee so as to enable such Indemnitee to investigate or defend any Claim. The Lessee shall keep the Indemnitee which is the subject of such proceeding fully apprised of the status of such proceeding and shall provide such Indemnitee with all information with respect to such proceeding as such Indemnitee shall reasonably request. In the event an Indemnitee has assumed control of any such proceeding, it shall keep the Lessee fully apprised of the status of such proceeding and shall provide the Lessee with all information, including the receipt of all settlement offers, with respect to such proceeding as such Indemnitee shall reasonably request. Where the Lessee or the insurers under a policy of insurance maintained by the Lessee undertake the defense of an Indemnitee with respect to a Claim, no additional legal fees or expenses of such Indemnitee in connection with the defense of such claim shall be indemnified hereunder unless such fees or expenses were incurred at the request of the Lessee or such insurers; provided that, if (i) in the written opinion of counsel to such Indemnitee an actual or potential material conflict of interest exists where it is advisable for such Indemnitee to be represented by separate counsel or (ii) such Indemnitee has been indicted or otherwise charged in a criminal complaint in connection with a Claim not excluded by Section 12.1(a) and such Indemnitee informs the Lessee that such Indemnitee desires to be represented by separate counsel, the reasonable fees and expenses of such separate counsel shall be borne by the Lessee. Subject to the requirements of any policy of insurance, an Indemnitee may participate at its own expense in any judicial proceeding controlled by the Lessee pursuant to the preceding provisions and such participation shall not constitute a waiver of the right to receive the indemnification provided in this Section 12.1. Notwithstanding anything to the contrary herein containedcontained herein, except as otherwise provided in the following sentence, during the continuance of a Lease Event of Default, the Mortgagor Lessee shall have not compromise any Claim without the right consent of the applicable Indemnitee unless such Claim is simultaneously discharged, such consent not to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien unreasonably withheld. Notwithstanding anything to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Liencontrary contained in this Section 12.1, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that the defense or settlement of any Claim in respect of which an Indemnitee is entitled to indemnification hereunder is governed by the terms of the Operating Agreement, such Contested Lien defense or settlement shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand governed by the Lender ifOperating Agreement; provided, that the defense or settlement of such Claim in accordance with the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but Operating Agreement shall not be required to, pay all limit the Lessee's obligations to indemnify such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender Claim pursuant to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid12.1.
Appears in 1 contract
Samples: Participation Agreement (Newfield Exploration Co /De/)
Contests. An Indemnitee shall forward to Lessee any notice such Indemnitee receives from any Person in regard to a proposed imposition or adjustment by any Governmental Authority that would result in a liability for Taxes with respect to which Lessee has liability under this Article 21 promptly after receipt by such Indemnitee; provided, however, that failure to do so shall not eliminate any liability by Lessee to an Indemnitee under this Article 21 except to the extent of additional interest, penalties and the like attributable to such failure or if such failure effectively precludes the ability to conduct a contest of such Taxes. Such Indemnitee shall consult with Lessee in determining whether to contest such proposed adjustment and the manner of proceeding with such contest (including whether and to what extent to allow Lessee to control the contest and to conduct the contest in its name if permissible under applicable Law or in the name of such Indemnitee); provided, however, that (a) such Indemnitee reserves the right to agree or not to agree to pursue any such contest, (b) Lessee shall keep such Indemnitee informed of the status of the contest and consult with such Indemnitee regarding the manner in which to proceed with such contest, and (c) such Indemnitee reserves the right to agree to any compromise or settlement proposal. Notwithstanding anything to the contrary herein containedcontained in this Section 21.5, such Indemnitee shall not be obligated to pursue a contest of any claim unless (i) prior to taking such action Lessee shall have agreed to pay or, in the case of item (C) below, lend on an interest-free basis, to such Indemnitee an amount equal to all out-of-pocket costs and expenses such Indemnitee actually incurs in connection with and reasonably allocable to contesting such claim, including, without limitation, (A) all reasonable legal, accountants’, and investigatory fees and disbursements, (B) the amount of any interest or penalty payable as a result of contesting such claim, and (C) if such contest is to be initiated by the payment of, and the claiming of a refund for, Taxes, sufficient funds to make such payment (and in the event such contest is finally determined adversely, the Mortgagor amount of such loan shall have be applied against Lessee’s obligation to indemnify such Indemnitee for the right Taxes which relate to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”such contest), (ii) such proceedings do not involve any material risk or danger of the sale, forfeiture, or loss of any Item of Equipment, or, if there is such a risk, Lessee has provided to such Indemnitee a bond in form and substance reasonably satisfactory to such Indemnitee in an amount sufficient to protect such Indemnitee from any detriment that would be suffered by such Indemnitee as a result of such sale, forfeiture, or loss or has otherwise made provision to protect the interests of such Indemnitee in a manner reasonably acceptable to such Indemnitee, and (iii) no Contested Lien shall constitute an Event of Default shall have occurred and be continuing. If (X) such Indemnitee shall fail to meet its obligations under this MortgageSection 21.5, if, but only if:
(Y) such Indemnitee exercises its discretion under clause (a) The Mortgagor shall forthwith give notice of any Contested Lien the first proviso of this Section 21.5 to the Lender at the time the same shall be asserted;
not pursue a claim, or (bZ) The Mortgagor shall either pay such Indemnitee exercises its discretion under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
clause (c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premisesfirst proviso of this Section 21.5, and Lessee shall permit the Lender to be represented in any relieved of its liability for such contest and Tax under Section 21.1(a); provided, however, that (XX) Lessee shall pay all expenses incurred, in so doing, including fees and expenses not be relieved of the Lender’s counsel liability under clause (all X) of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Xxxxxxxxxx XX-600-2C10; MSN 10070 this Section 21.5 to the extent that any such Contested Lien shall be determined adverse Indemnitee’s failure to the Mortgagormeet its obligations did not materially affect Lessee’s indemnification obligation hereunder, or (iiYY) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but Lessee shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment relieved of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph liability under clause (bY) of this Section 21.5 to the extent that Indemnitee exercised its right to not agree to pursue a contest and may demand such contest would be reasonably likely to result in a material unindemnified harm to such Indemnitee as determined in such Indemnitee’s reasonable discretion, and (ZZ) Lessee shall not be relieved of liability under clause (Z) of this Section 21.5 to the extent that Indemnitee exercised its right to not agree to any compromise or settlement proposal and such exercise was reasonable. In any case described in the immediately preceding sentence, such Indemnitee shall promptly return any amounts previously advanced by Lessee for the payment upon any bond or title indemnity furnished as aforesaidof the Taxes which were the subject of the contest; provided, however, that in a case described in clause (Z) above, such Indemnitee shall be obligated to repay Lessee only to the extent of the excess of the amounts previously advanced by Lessee over the amount of such settlement to which Lessee did not withhold its consent.
Appears in 1 contract
Contests. Notwithstanding anything Lessee shall pay on or before the time or times prescribed by law any Taxes (except any Taxes excluded by the proviso to Section 11.2(a)); provided, however, that Lessee shall be under no obligation to pay any such Tax so long as the payment of such Tax is not delinquent or is being contested by a Permitted Contest. If any claim or claims is or are made against any Indemnitee solely for any Tax which is subject to indemnification as provided in Section 11.2(a), Indemnitee shall as soon as practicable, but in no event more than twenty (20) days after receipt of formal written notice of the Tax or proposed Tax, notify Lessee and if, in the reasonable opinion of Lessee and (in the case of any Tax which may reasonably be expected to exceed $250,000 in the aggregate) tax counsel acceptable to the contrary herein containedIndemnitee, there exists a reasonable basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and if the provisos of the definition of "Permitted Contest" continue to be satisfied and so long as no Lease Event of Default exists), Lessee at its expense may, to the extent permitted by Applicable Laws and Regulations, contest such Tax, and subsequently may appeal any adverse determination, in the appropriate administrative and legal forums; provided, that in all other circumstances, upon notice from Lessee to such Indemnitee that there exists a reasonable basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to Lessee reasonably acceptable to the Indemnitee), the Mortgagor Indemnitee, at Lessee's expense, shall contest any such Tax (so long as the provisos of the definition of "Permitted Contest" continue to be satisfied and so long as no Lease Event of Default exists). Lessee shall pay all expenses incurred by the Indemnitee in contesting any such Tax (including, without limitation, all reasonable attorneys' and accountants' fees, including the allocated costs of internal counsel), upon demand by the Indemnitee. Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand controlled by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so Indemnitee to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.the
Appears in 1 contract
Samples: Participation Agreement (Applied Materials Inc /De)
Contests. Notwithstanding anything (a) Nothing in this Agreement shall be construed to prevent the General Partner from contesting in good faith, as the tax matters partner of Parent OP in accordance with the OP Agreement, any claim that, if successful, would result in an indemnity payment pursuant to Section 6.
(b) The Xxxxxxxxxxxx Parties shall provide written notice to Parent OP promptly after learning of any audit or other proceeding involving a Xxxxxxxxxxxx Party for which Parent OP could have an indemnification obligation under Section 6 (a “Proceeding”). Failure to provide prompt written notice of a Proceeding shall preclude any indemnity hereunder to the contrary herein containedextent Parent OP is materially prejudiced thereby.
(i) Upon receipt of notice of a Proceeding, Parent OP shall either (i) assume the conduct and control of the settlement or defense of such Proceeding, and the Xxxxxxxxxxxx Parties shall cooperate with Parent OP in connection therewith (including, for example, signing a power of attorney with respect to such Proceeding) or (ii) advise the Xxxxxxxxxxxx Parties that it does not wish to control such Proceeding, in which case Parent OP shall bear all costs and expenses of a nationally recognized law firm retained to represent the Xxxxxxxxxxxx Parties in such Proceeding, which counsel shall be reasonably acceptable to Parent OP. In either event, the Mortgagor party not controlling the Proceeding shall be given the right to participate in such Proceeding, at its own expense. So long as Parent OP is reasonably contesting any Proceeding, the Xxxxxxxxxxxx Parties (or their Indirect Owners) shall not pay or settle any such Proceeding without the consent of Parent OP, which consent may be withheld in Parent OP’s sole discretion. To the maximum extent possible, Parent OP and the Xxxxxxxxxxxx Parties shall work together to sever the Proceeding from any other tax issues or matters with respect to Xxxxxxxxxxxx Parties. In no event shall Parent OP be given access to the individual tax records or returns of Xxxxxxxxxxxx.
(ii) Subject to Section 12(b)(iii), (a) a final determination under Section 1313 of the Code of the claim underlying the Proceeding shall be binding on Parent OP and the Xxxxxxxxxxxx Parties and (b) if the Xxxxxxxxxxxx Parties are found liable for the Taxes that were the subject of the Proceeding, and it is determined that such Taxes were caused by Parent OP’s breach of this Agreement, Parent OP shall promptly pay the Xxxxxxxxxxxx Parties the amount payable pursuant to Section 6 of this Agreement.
(iii) Notwithstanding the foregoing, if either Parent OP or the Xxxxxxxxxxxx Parties disputes the finding with respect to causation, Parent OP shall select a nationally recognized accounting firm or law firm experienced in tax protection matters and reasonably acceptable to Representative (the “Dispute Firm”) to review the indemnification claim and the applicable provisions of this Agreement. The Dispute Firm shall have fifteen (15) business days (or such additional time as the Dispute Firm determines is reasonably necessary) to review such materials and deliver to Parent OP and Representative its determination of whether any amount is due under this Agreement. The determination of the Dispute Firm shall be final and binding on the parties to this Agreement, and Parent OP shall promptly pay over to the Xxxxxxxxxxxx Parties such amounts determined by the Dispute Firm to be due under this Agreement and the Xxxxxxxxxxxx Parties shall have no further recourse against Parent OP for the indemnification claim with respect to which such amounts have been paid. Parent OP shall bear all costs and expenses of the Dispute Firm; provided, the Xxxxxxxxxxxx Parties shall bear such costs if Parent OP is found to have no liability pursuant to this Agreement.
(c) Subject to paragraphs (a) and (b) above, the Xxxxxxxxxxxx Parties shall have the right to contest by appropriate legal proceedings diligently prosecuted participate in any Taxes imposed audit, claim for refund, or assessed upon administrative or judicial proceeding involving any asserted Tax liability, refund, or adjustment to the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice taxable income of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided party hereto that could result in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture disallowance of the Premises, and shall permit the Lender to be represented tax treatment set forth in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest Section 9 at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidits own expense.
Appears in 1 contract
Samples: Contribution Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify the Lessee. The Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Lessee desire to, assume and control the Mortgagor defense thereof; provided, however, that the Lessee shall have acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, provided further, that the Lessee shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessee stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender ifLessee in accordance with the foregoing. Each Tax Indemnitee shall at the Lessee's expense supply the Lessee with such information and documents in such Tax Indemnitee's possession reasonably requested by the Lessee as are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 7.4. Unless an Event of Default shall have occurred and 57 be continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent of the Lessee, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 with respect to such Claim. Notwithstanding anything contained herein to the contrary, (a) a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 7.4 with respect to such claim (and any related claim with respect to other taxable years the contest of which is precluded as a result of such waiver) and (b) no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless there has been a change in law which in the opinion of Tax Indemnitee's counsel creates substantial authority for the Lender, and notwithstanding any success of such contest, . Each Tax Indemnitee and the Premises Lessee shall be consult in jeopardy or in danger of being forfeited or foreclosed; provided that if good faith with each other regarding the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge conduct of such liens; and any amount expended contest controlled by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaideither.
Appears in 1 contract
Samples: Master Agreement (Choicepoint Inc)
Contests. Notwithstanding anything to the contrary herein contained, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor Nothing in this Agreement shall forthwith give notice be construed to prevent UpREIT from contesting, through its Tax Matters Partner in accordance with the Partnership Agreement as part of the unified audit of the UpREIT, any claim in respect of any Contested Lien to "partnership" item of the Lender at the time the same shall be asserted;UpREIT that, if successful, would result in an Income Inclusion (a "Partnership Level Issue").
(b) The Mortgagor shall either pay If UpREIT contests a Partnership Level Issue that, if successful, would result in an Income Inclusion, UpREIT's liability for indemnification under protest or deposit with the Lender the full amount Section 4 hereof (the “Lien Amount”other than reasonable costs and expenses described in Section 6(f) of such Contested Lienthe Agreement) shall, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu at UpREIT's election, be deferred until thirty (30) days after a Final Determination of such payment the Mortgagor may furnish to the Lender a bond or title indemnity Xxxxx Indemnitee's federal income tax liability in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;respect of an Income Inclusion.
(c) The Mortgagor If any audit or proceeding involving an indemnifiable adjustment is being conducted in a proceeding involving such Xxxxx Indemnitee, which cannot be transferred to the UpREIT as a partnership item (a "Xxxxx Level Issue"), such Xxxxx Indemnitee hereby agrees (i) promptly to notify UpREIT in writing of such adjustment (and the failure of such Xxxxx Indemnitee to so notify UpREIT shall diligently prosecute preclude any indemnity hereunder to the extent UpREIT's right to effect its contest rights hereunder has been precluded by such failure), and (ii) upon UpREIT's delivery to of a written opinion of nationally recognized tax counsel reasonably acceptable to such Xxxxx Indemnitee ("Tax Counsel") to the effect that there is a Realistic Possibility of Success upon contest of any Contested Lien such Xxxxx Level Issue, such Xxxxx Indemnitee will contest that adjustment by appropriate legal proceedings filing a protest and administrative appeal and prosecuting the same in good faith; provided, however, that such Xxxxx Indemnitee will not be obligated to pursue an administrative appeal if such Xxxxx Indemnitee instead pursues relief in Tax Court or a court having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);refund jurisdiction.
(d) The Mortgagor shall pay each If , within 30 days following the failure of such Contested Lien administrative proceedings with respect to a Xxxxx Level Issue, UpREIT delivers to a Xxxxx Indemnitee a written opinion of Tax Counsel to the effect that there is a Realistic Possibility of Success if the proposed adjustment is presented to a court for resolution, then such Xxxxx Indemnitee will contest the proposed adjustment in good faith in the Tax Court or by paying the tax (and all Lien Amounts together with any applicable interest and penalties thereon penalties) and suing for refund in the Court of Federal Claims or appropriate Federal District Court. If, within 30 days following a final adverse decision of such court with respect to such Xxxxx Level Issue, UpREIT delivers to such Xxxxx Indemnitee a written opinion of Tax Counsel to the effect that it is more likely than not that such decision would be reversed on appeal, then such Xxxxx Indemnitee will appeal such decision to the appropriate Federal Court of Appeals. With respect to any of the above-described proceedings, such Xxxxx Indemnitee will keep UpREIT and its counsel informed as to the progress of such proceedings, give UpREIT and its counsel the opportunity to review and comment in advance on all written submissions and filings relevant to indemnifiable issues (after making appropriate redactions to preserve the confidentiality of the such Xxxxx Indemnitee return as to other issues), and consider in good faith any suggestions made by UpREIT or its counsel.
(e) Such Xxxxx Indemnitee shall present any settlement offer provided to such Xxxxx Indemnitee pursuant to a Xxxxx Level Issue to UpREIT. If UpREIT recommends acceptance of a settlement offer of a Xxxxx Level Issue or if the Tax Matters Partner recommends acceptance of a settlement offer in respect of a Partnership Level Issue, but such Xxxxx Indemnitee declines to accept such offer in writing within 30 days (if such Xxxxx Indemnitee does not respond within 30 days, such lack of response shall be treated as acceptance of UpREIT's or the Tax Matters Partner's recommendation, respectively), (1) the obligation of UpREIT to make indemnity payments as the result of any such contest or proceedings shall not thereafter exceed the obligation that it would have had if such contest had been settled or proceeding terminated on the basis recommended by UpREIT or the Tax Matters Partner, as applicable, and (2) in the case of a Xxxxx Level Issue, UpREIT shall have no further liability for costs or other expenses in respect of such contest.
(f) Notwithstanding the foregoing, such Xxxxx Indemnitee will have no obligation to contest any action with respect to a Xxxxx Level Issue (i) if unless such items could give rise to a federal income tax liability (disregarding other items in the assessment and considering effects in future years) in excess of $10,000, (ii) without UpREIT paying when due, reasonable third-party costs and out-of-pocket expenses including reasonable legal, witness and accounting fees and other expenses and, in the case of proceedings before the Court of Federal Claims or Federal District Court, the amount of tax (and any applicable interest and penalties) for which refund is claimed, and (iii) to the extent that any such Contested Lien shall be determined adverse Xxxxx Indemnitee waives in writing UpREIT's obligation to the Mortgagorindemnify such Xxxxx Indemnitee for such items, or in which case all third-party costs and out-of-pocket expenses described in clause (ii) forthwith upon demand thereafter incurred and all taxes would be paid by the Lender if, in the opinion of the Lender, and notwithstanding such Xxxxx Indemnitee.
(g) such Xxxxx Indemnitee shall not settle any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosedXxxxx Level Issue without UpREIT's consent; provided that if the Mortgagor shall fail so to do, the Lender may, but such Xxxxx Indemnitee shall not be required toto contest any proposed adjustment and may settle any such proposed adjustment if such Xxxxx Indemnitee shall waive its right to indemnity under this Agreement with respect to such adjustment and any Income Inclusion that results from such adjustment and, in the case of proceedings before the Court of Federal Claims or Federal District Court, shall pay all such Contested Liens to UpREIT the amount of tax (and Lien Amounts and any applicable interest and penalties thereon and penalties) previously paid or advanced by UpREIT with respect to such other sums as may be necessary in adjustment or the judgment of the Lender to obtain the release and discharge contest of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing adjustment under Section 6(f), plus interest at the Default Rate until paidrate per annum equal to the weighted average cost of debt capital to the UpREIT, computed from the time such amounts were paid or advanced by UpREIT.
(h) Within thirty (30) days after a Final Determination of the liability of such Xxxxx Indemnitee in respect of a Xxxxx Level Issue, UpREIT and payable upon demand; and provided further that each Indemnitee agree to pay each other, as applicable, the Lender may in net amount of (i) the payment owed by the UpREIT to such case use and apply monies deposited as provided in paragraph (b) Xxxxx Indemnitee of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.indemnification hereunder, not theretofore paid resulting from the outcome of such contest, and
Appears in 1 contract
Samples: Tax Indemnification Agreement (Prime Group Realty Trust)
Contests. Notwithstanding anything In respect of the indemnification provided under Section 7.1(a), promptly after receipt by an Indemnitee of notice of any pending or threatened Claim, such Indemnitee shall, if a claim for indemnification in respect thereof is to be made against the Lessee, give notice thereof to the contrary herein contained, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and Lessee. So long as no Contested Lien shall constitute an Event of Default under this Mortgageis continuing, ifthe Lessee, but only if:
at its own expense, may elect to assume the defense of any such Claim through its own counsel, which shall be subject to the reasonable approval of the Indemnitee, on behalf of the Indemnitee (awith full right of subrogation to the Indemnitee’s rights and defenses). The Lessee must indicate its election to assume such defense by written notice to the Indemnitee within forty-five (45) The Mortgagor shall forthwith give days following receipt of Indemnitee’s notice of any Contested Lien to the Lender at Claim, or in the case of a third-party claim which requires a shorter time for response then within such shorter period as specified in the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) Indemnitee’s notice of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contestClaim; provided that in lieu of such payment Indemnitee has given the Mortgagor may furnish Lessee notice thereof. If the Lessee denies liability or fails to respond to the Lender a bond notice within the time period set forth above, the Indemnitee may defend or title compromise the Claim as it deems appropriate without prejudice to any of Indemnitee’s rights hereunder. If the Lessee shall have elected to assume the defense of any such Claim, then upon the request of the Lessee, the Indemnitee requesting payment of indemnity in such amount and form, and issued by a bond under Section 7.1(a) shall promptly furnish the Lessee with copies of any records or title insuring company, as may be satisfactory documents pertaining to the Lender;
(c) The Mortgagor shall diligently prosecute matter to be indemnified and, to the contest extent known by such Indemnitee, a reasonably detailed explanation of the circumstances giving rise to the claim of indemnification and the determination of the amount of the requested indemnity payment. Upon payment in full to Indemnitee of any Contested Lien by appropriate legal proceedings having indemnity pursuant to Section 7.1(a), the effect Lessee shall be subrogated to any right of staying the foreclosure or forfeiture Indemnitee in respect of the Premisesmatter against which such indemnity has been paid. If the Lessee shall have elected to assume the defense of any such Claim, upon the written request at any time and shall permit from time to time of the Lender Lessee, Indemnitee shall, at the expense of the Lessee, take such reasonable actions and execute such documents as are necessary or reasonably appropriate to be represented assist the Lessee in the preservation and enforcement against third parties of the Lessee’s right of subrogation hereunder. The Indemnitee may employ separate counsel in any such contest Claim and shall pay all expenses incurredparticipate in the defense thereof, in so doing, including but the fees and expenses of the Lender’s such counsel (all of which shall constitute so much additional Indebtedness bearing interest be at the Default Rate until paid, expense of the Indemnitee unless the Indemnitee and payable upon demand);
(d) The Mortgagor the Lessee shall pay each have been advised by counsel that there exists a conflict of interest in such Contested Lien counsel’s representation of the Indemnitee and all Lien Amounts together with interest the Lessee in which case the fees and penalties thereon (i) if and to the extent that any expenses of such Contested Lien separate counsel shall be determined adverse to for the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion account of the Lender, Lessee. All fees and notwithstanding any such contestexpenses shall be paid periodically as incurred. So long as no Default or Event of Default shall be continuing, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but Lessee shall not be required liable for any settlement of any such Claim effected without its consent unless the Lessee shall fail to, pay or elect in writing not to, assume the defense thereof in which case the Indemnitee, without waiving any rights to indemnification hereunder, may defend such Claim and enter into any good faith settlement thereof without the prior written consent of the Lessee. The Lessee shall not, without the prior written consent (not to be unreasonably withheld) of the Indemnitee, effect any settlement of any such Claim unless such settlement includes an unconditional release of the Indemnitee from all liabilities that are the subject of such Contested Liens Claim. The parties agree to cooperate in any defense or settlement of any such Claim and Lien Amounts and interest and penalties thereon and such to give each other sums as may be necessary reasonable access to all information relevant thereto subject to appropriate confidentiality agreements. The parties will similarly cooperate in the judgment prosecution of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon claim or lawsuit against any bond or title indemnity furnished as aforesaidthird party.
Appears in 1 contract
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify the Lessee. The Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Lessee desires to, assume and control the Mortgagor defense thereof; provided, however, that the Lessee, shall have acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, provided further, that the Lessee shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any risk of imposition of criminal liability or any material risk of civil liability in excess of $5,000,000 (unless, in the case of the risk of civil liability, the Lessee has posted a bond or other security, or made other arrangements with respect to such Contested potential liability, as is reasonably satisfactory to such Tax Indemnitee) on such Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessee stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender ifLessee in accordance with the foregoing. Each Tax Indemnitee shall, at the Lessee’s expense, supply the Lessee with such information and documents in such Tax Indemnitee’s possession as are reasonably requested by the Lessee and are necessary or advisable for the Lessee to participate in any action, suit or proceeding to the extent permitted by this Section 7.4. Unless an Event of Default shall have occurred and be continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent of the Lessee, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 with respect to such Claim. Notwithstanding anything contained herein to the contrary, (a) a Tax Indemnitee will not be required to contest a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to indemnification under this Section 7.4 with respect to such claim (and any related claim with respect to other taxable years the contest of which is precluded as a result of such waiver) and (b) no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless there has been a change in law which in the opinion of Tax Indemnitee’s counsel creates substantial authority for the Lender, and notwithstanding any success of such contest, . Each of Tax Indemnitee and the Premises Lessee shall be consult in jeopardy or in danger of being forfeited or foreclosed; provided that if good faith with each other regarding the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge conduct of such liens; and any amount expended contest controlled by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaideither.
Appears in 1 contract
Contests. Notwithstanding anything If claim is made against an Indemnitee for any Imposition with respect to which Lessee has an obligation under this Section 16.02 and Lessor has actual notice thereof, Lessor shall cause such Indemnitee to promptly notify the Lessee but failure to so notify the Lessee shall not reduce the Lessee's obligations hereunder, except to the contrary herein contained, extent that Lessee is thereby precluded from contesting such claim or Imposition. If reasonably requested by the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed Lessee in writing and provided no Default or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default shall have occurred and is continuing, Lessor, at the sole expense of the Lessee, shall itself (or shall cause such Indemnitee to) in good faith and diligently contest (and not settle without Lessee's written consent) or shall (or shall cause such Indemnitee to) permit the Lessee, if desired by the Lessee, to contest in the name of the Lessee the validity, applicability or amount of such Imposition. Lessee may contest, or require that Lessor or such Indemnitee contest, by (a) resisting payment thereof if practicable, (b) not paying the same except under this Mortgageprotest with funds advanced by Lessee on an interest-free basis, ifif protest is necessary and proper, but only ifand (c) if payments be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings; provided, however, that, in each such instance, the Lessor and such Indemnitee shall not be required to undertake any contest unless:
(ai) The Mortgagor Lessee shall forthwith give notice have provided Lessor with an opinion of legal counsel reasonably acceptable to Lessor to the effect that a reasonable basis exists to contest such claim and, prior to the commencement of any Contested Lien appeal of an adverse judicial decision, with an opinion of such legal counsel to the Lender at the time the same be effect that a reasonable basis exists to appeal such adverse judicial decision (which opinions -47- shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount obtained at Lessee's sole cost and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demandexpense);
(dii) The Mortgagor such proceedings do not involve any material risk or danger of the sale, forfeiture or loss of the Aircraft or any part thereof or interest therein or the imposition of civil or criminal fines, penalties, forfeitures or sanctions against Lessor or such Indemnitee or the creation of any Lien other than a Lien for Impositions not yet due or being contested in good faith by appropriate proceedings, and for payment of which such reserves if any, as are required to be provided under generally accepted accounting principles have been made unless Lessee has provided to Lessor a bond or other security reasonably satisfactory to Lessor (provided that in the case of civil or criminal fines, penalties, forfeitures or sanctions such bond or other security shall pay each be satisfactory to Lessor in its sole discretion) to protect against such Contested Lien risk or danger;
(iii) in the event that the subject matter of the contest is of a continuing nature and all Lien Amounts together has previously been decided adversely pursuant to the contest provisions of this Section 16.02 by the highest court to which an appeal could be taken (other than the U.S. Supreme Court), 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 Lessor shall have received an opinion of independent tax counsel selected by the Lessee and reasonably acceptable to Lessor, which opinion shall be obtained at the Lessee's sole expense, to the effect that, as a result of such change, it is more likely than not that the position which Lessor, an Indemnitee or the Lessee, as the case may be, had asserted in such previous contest would prevail;
(iv) no Default or Event of Default shall have occurred and be continuing;
(v) prior to the commencement of any contest undertaken by the Lessee or any contest undertaken by Lessor or any Indemnitee with interest respect to which Lessor or such Indemnitee is required to follow the direction of the Lessee, the Lessee shall have delivered to Lessor a written acknowledgement of its obligations to indemnify fully Lessor and penalties thereon (i) if and such Indemnitee to the extent that any the contest is not successful;
(vi) if such Contested Lien shall contest is to be determined adverse to the Mortgagor, or (ii) forthwith upon demand initiated by the Lender if, in the opinion of the Lenderpayment of, and notwithstanding the claiming of a refund for, such Imposition, Lessee shall have advanced to Lessor or such Indemnitee sufficient funds (on an interest-free basis) to make such payments, provided, however, that Lessee shall indemnify Lessor and such Indemnitee for any adverse tax consequences resulting from such contest, the Premises shall be in jeopardy advance; and
(vii) such contest does not involve any Imposition or in danger taxes of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but any Indemnitee not indemnified hereunder. Lessee shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may deemed to be necessary in the judgment default under any of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) above indemnification provisions of this Section 16.02 so long as Lessee shall diligently prosecute a contest in conformity with the requirements of this Section 16.02(c), or in the case where the Lessor or an Indemnitee shall be prosecuting such contest pursuant to this Section 16.02(c), Lessee has fulfilled all of its obligations under this Section 16.02(c) with respect to such contest. Notwithstanding the foregoing, if a claim is made against an Indemnitee which, if successful, would result in an Imposition under circumstances which would require the Lessee to indemnity such Indemnitee, such Indemnitee shall be released from its responsibility to contest such claim, or part thereof, if it agrees in writing with Lessee not to seek indemnification from Lessee in respect of the claim, or such part thereof to be contested. In the event an Indemnitee fails diligently to contest, or refuses to permit the Lessee to contest, a claim or, part thereof which such Indemnitee has the obligation to contest or to permit Lessee to contest under this Section 16.02, then Lessee shall not be obligated to indemnify such Indemnitee for such claim or such part thereof to the extent that Lessee is precluded thereby from contesting any such claim and may demand Lessor shall cause such Indemnitee to refund to Lessee to such extent any amounts paid or advanced by Lessee in connection with such Imposition that were the subject of such claim (plus interest from the date payment upon any bond or title indemnity furnished as aforesaidis due at the rate established for refunds by the authority imposing such Imposition).
Appears in 1 contract
Samples: Lease Agreement (Turn Works Acquisition Iii Sub a Inc)
Contests. Notwithstanding anything If any claim or claims is or are made against any Indemnitee for any Tax which is subject to indemnification as provided in Section 7.2(a), such Indemnitee shall as soon as practicable, but in no event more than thirty (30) days after receipt of formal written notice of the Tax or proposed Tax, notify the Lessee and shall not take action with respect to such Tax without the consent of the Lessee (such consent not to be unreasonably withheld, conditioned or delayed) for thirty (30) days after the receipt of such notice by the Lessee; provided, however, that in the case of any such Tax, if action shall be required by Applicable Law to be taken prior to the contrary herein containedend of such period of thirty (30) days, such Indemnitee shall, in such notice to the Lessee, inform the Lessee of such shorter period, and no action shall be taken with respect to such Tax without the consent of the Lessee (such consent not to be unreasonably withheld, conditioned or delayed) before seven (7) days before the end of such shorter period. If, in the good faith opinion of the Lessee there exists a reasonable basis to contest such Tax (and if the provisos of the definition of “Permitted Contest” continue to be satisfied), the Mortgagor Lessee at its expense may, to the extent permitted by Applicable Laws and provided that it has acknowledged in writing its liability for the Tax at issue if the contest is not successful, contest such Tax, and subsequently may appeal any adverse determination (other than to the United States Supreme Court), in the appropriate administrative and legal forums; provided, that in all other circumstances, upon notice from the Lessee to such Indemnitee that there exists a reasonable basis to contest any such Tax or, in the case of an appeal of adverse judicial determination, the position asserted in such appeal will more likely than not prevail (in each case, as supported by an opinion of tax counsel to the Lessee reasonably acceptable to the Indemnitee), the Indemnitee, at the Lessee’s expense, shall contest any such Tax (so long as the provisos of the definition of “Permitted Contest” continue to be satisfied and, in the case of a Tax on gross or net income, the aggregate amount of the Tax exceeds $50,000, which amount shall be verified and certified by an independent public accounting firm mutually acceptable to the Lessee and the applicable Indemnitee in accordance with Section 7.2(a)(v). The Lessee shall pay all out-of-pocket expenses incurred by the Indemnitee in contesting any such Tax (including, without limitation, all reasonable attorney’s and accountants’ fees and expenses), upon demand by the Indemnitee. The Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that any such Contested Lien participation by the Lessee does not interfere with the Indemnitee’s control of such contest and the Lessee shall in all events be determined adverse kept informed, to the Mortgagorextent practicable, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so material developments relative to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaid.such
Appears in 1 contract
Contests. (a) After the Closing, the Purchaser shall promptly notify the Seller in writing of the proposed assessment or the commencement of any Tax audit or administrative or judicial proceeding or of any demand or claim with respect to the Tax of the Company which, if determined adversely to the taxpayer or after the lapse of time, could be grounds for indemnification by the Seller under Section 7.01. Such notice shall contain factual information (to the extent known to the Purchaser, its Affiliates or the Company) describing the asserted Tax liability in reasonable detail and shall include copies of any notice or other document received from any Taxing Authority in respect of any such asserted Tax liability. If the Purchaser fails to give the Seller prompt notice of an asserted Tax liability as required by this Section 7.03, then the Seller shall not have any obligation to indemnify for any loss arising out of such asserted Tax liability, but only to the extent that failure to give such notice results in a detriment to the Seller.
(b) In the case of a Tax audit or administrative or judicial proceeding (a “Contest”) that relates to Pre-Closing Periods (other than Straddle Periods), the Seller shall have the sole right, at its expense, to control the conduct of such Contest; provided, that (i) the Seller shall keep the Purchaser reasonably informed regarding the progress and substantive aspects of such Contest and (ii) if the settlement or compromise of such Contest would be expected to materially increase the Taxes of the Purchaser or any of its Affiliates (including the Company) in a Post-Closing Period, (a) reasonable comments of the Purchaser or its advisers received by the Seller or its advisers with reasonable advance notice shall be incorporated in the documents to be submitted in relation to the Contest and (b) the Seller shall not settle or compromise any asserted liability without the prior written consent of the Purchaser (not to be unreasonably withheld, conditioned or delayed).
(c) With respect to Straddle Periods (other than a Contest described in Section 7.03(d)), the Seller may elect to direct and control, through counsel of its own choosing, any Contest involving any asserted Tax liability with respect to which indemnity may be sought from the Seller pursuant to Section 7.01. If the Seller elects to direct a Contest, the Seller shall within ninety (90) days of receipt of the notice of asserted Tax liability notify the Purchaser of its intent to do so, and the Purchaser shall cooperate and shall cause the Company to fully cooperate, at the Seller’s expense, in each phase of such Contest. If the Seller elects not to direct the Contest, the Purchaser or the Company may assume control of such Contest (at the Purchaser’s expense), and the Purchaser shall provide the Seller a timely and reasonably detailed summary of each phase of such Contest. However, in such case, none of the Purchaser or the Company may settle or compromise any asserted liability without prior written consent of the Seller; provided, however, that consent to settlement or compromise shall not be unreasonably withheld. In any event, the Seller may participate, at its own expense, in the Contest.
(d) Notwithstanding anything to the contrary herein containedin this Agreement, the Mortgagor Seller shall have the exclusive right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”)control in all respects, and no Contested Lien shall constitute an Event neither the Purchaser nor any of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice of any Contested Lien to the Lender at the time the same its Affiliates shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit entitled to participate in, any Contest with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish respect to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if any Tax Return of the Seller or any of its Subsidiaries (other than the Company) and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by any Tax Return of a Seller Group.
(e) The Purchaser and the Lender ifSeller agree to cooperate, and the Purchaser agrees to cause the Company to cooperate, in the opinion defense against or compromise of any claim in any Contest.
(f) Notwithstanding anything to the Lendercontrary in this Agreement, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon 7.03 shall control with respect to any bond or title indemnity furnished as aforesaidContest.
Appears in 1 contract
Contests. Notwithstanding anything Lessee shall pay on or before the time or times prescribed by law any Taxes (except any Taxes excluded by the proviso to SECTION 7.2(a)). If any claim or claims is or are made against any Indemnitee solely for any Tax which is subject to indemnification as provided in SECTION 7.2(a), Indemnitee shall as soon as practicable, but in no event more than 30 days after receipt of formal written notice of the Tax or proposed Tax, notify Lessee and if, in the reasonable opinion of Lessee and (in the case of any Tax which may reasonably be expected to exceed $50,000 in the aggregate) tax counsel acceptable to the contrary herein containedIndemnitee, there exists a reasonable basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and if the PROVISOS of the definition of "Permitted Contest" continue to be satisfied and so long as no Lease Event of Default exists), Lessee at its expense may, to the extent permitted by applicable law, contest such Tax, in the appropriate administrative and legal forums; PROVIDED, that in all other circumstances, upon notice from Lessee to such Indemnitee that there exists a reasonable basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to Lessee reasonably acceptable to the Indemnitee), the Mortgagor Indemnitee, at Lessee's expense, shall contest any such Tax (so long as the PROVISOS of the definition of "Permitted Contest" continue to be satisfied and so long as no Lease Event of Default exists). Lessee shall pay all expenses incurred by the Indemnitee in contesting any such Tax (including all reasonable attorneys' and accountants' fees, including the reasonable allocated costs of internal counsel), upon demand by the Indemnitee. Lessee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien to proceedings controlled by the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that such participation by such Person does not interfere with the Indemnitee's control of such contest and Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitee shall have the right to participate in the conduct of any proceedings controlled by Lessee and the Indemnitee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim for which Lessee would be required to make a reimbursement payment hereunder will not be settled or compromised without Lessee's prior written consent (which consent shall neither be unreasonably delayed nor withheld), unless the PROVISOS of the definition of "Permitted Contest" would not continue to be satisfied. Indemnitee shall endeavor to settle or compromise any such Contested Lien shall be determined adverse contested claim in accordance with written instructions received from Lessee; PROVIDED, that (x) Lessee on or before the date the Indemnitee executes a settlement or compromise pays the contested Tax to the Mortgagor, extent agreed upon or makes an indemnification payment to the Indemnitee in an amount acceptable to the Indemnitee; and (iiy) forthwith upon demand by the Lender ifsettlement or compromise does not, in the reasonable opinion of the LenderIndemnitee materially adversely affect the right of Lessor or such Indemnitee to receive Rent or the Lease Balance or any other payment pursuant to the Operative Documents, or involve a material risk of sale, forfeiture or loss of the Leased Property or any interest therein or any matter described in the PROVISOS to the definition of "Permitted Contest". The failure of an Indemnitee to contest timely a claim against such Indemnitee for any Tax which is subject to indemnification under SECTION 7.2(a) and for which such Indemnitee has an obligation to Lessee to contest under this SECTION 7.2(b) in the manner required by Applicable Laws where Lessee has timely requested that such Indemnitee contest such claim shall relieve Lessee of its obligations to such Indemnitee under SECTION 7.2(a) with respect to such claim only to the extent such failure results in the loss of an effective contest. If Applicable Laws require the payment of a contested Tax as a condition to, or regardless of, its being contested, and notwithstanding Lessee chooses to contest such Tax or to direct the Indemnitee to contest such Tax in accordance with this Section, then Lessee shall provide the Indemnitee with the funds to pay such Tax, such provision of funds to be deemed a non-interest bearing loan by Lessee to the Indemnitee to be repaid by any recovery of such Tax from such contest and any remaining unpaid amount not recovered to offset Lessee's obligation to indemnify the Indemnitee for such Tax. Lessee shall indemnify the Indemnitee on a grossed-up basis in accordance with SECTION 7.6 for and against any adverse consequences of any such contestinterest-free loan. If the Indemnitee receives a refund (or like adjustment) in respect of any Tax for which the Indemnitee has been reimbursed by Lessee, the Premises Indemnitee shall be in jeopardy promptly remit the amount of such refund (or in danger like adjustment) to Lessee, net of being forfeited or foreclosedall costs and expenses incurred by such Indemnitee; provided PROVIDED, HOWEVER, that if the Mortgagor shall fail so to do, the Lender may, but Indemnitee shall not be required to remit any amount pursuant to this sentence in excess of the amounts previously paid by Lessee to, pay all or on behalf of, such Contested Liens and Lien Amounts and interest and penalties thereon and Indemnitee with respect to such other sums as may be necessary in the judgment of the Lender Tax pursuant to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidARTICLE VII.
Appears in 1 contract
Samples: Participation Agreement (Remec Inc)
Contests. Notwithstanding anything Lessee shall pay at the time and in the manner set out in Section 7.2(c) any Taxes subject to indemnification pursuant to Section 7.2(a); provided, however, that Lessee shall be under no obligation to pay any such Tax so long as the payment of such Tax is not delinquent or is being contested by a Permitted Contest. If any claim is made against any Indemnitee solely for any Tax which is subject to indemnification as provided in Section 7.2(a), Indemnitee shall as soon as practicable, but in no event more than 20 days after receipt of written notice, notify the Lessee and if, in the reasonable opinion of tax counsel to the contrary herein containedIndemnitee in the case of any Tax that may reasonably be expected to exceed $5,000,000 in the aggregate, there exists a basis to contest such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (and if the provisos of the definition of "Permitted Contest" continue to be satisfied and so long as no Event of Default exists), the Mortgagor Lessee at its expense may, to the extent permitted by Applicable Law, contest such Tax; provided that in all other circumstances, upon notice from the Lessee to such Indemnitee that there exists a basis to contest any such Tax which satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax counsel to the Indemnitee), the Indemnitee, at the Lessee's expense, shall contest any such Tax. The Lessee shall pay all expenses incurred by the Indemnitee in contesting any such Tax (including all reasonable attorneys' and accountants' fees), upon written demand by the Indemnitee. The Indemnitee shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon participate in the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice conduct of any Contested Lien proceedings controlled by the Lessee and the Indemnitee shall in all events be kept informed of material developments relative to such proceedings. The Lessee shall have the Lender at right to participate in the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest conduct of any Contested Lien proceedings controlled by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) if and Indemnitee to the extent that such participation by such Person does not interfere with the Indemnitee's control of such contest and the Lessee shall in all events be kept informed, to the extent practicable, of material developments relative to such proceedings. The Indemnitees agree that a contested claim will not be settled or compromised without the Lessee's prior written consent (which consent shall neither be unreasonably delayed nor withheld), unless the provisos of the definition of a "Permitted Contest" would not continue to be satisfied. Each Indemnitee shall endeavor to settle or compromise any such Contested Lien contested claim in accordance with written instructions from the Lessee. The failure of an Indemnitee to timely contest a claim against it for any Tax for which it has an obligation to contest under this Section 7.2(b) shall be determined adverse relieve the Lessee of its obligations to such Indemnitee under Section 7.2(a) only to the Mortgagorextent such failure results in the loss of an effective contest. If Applicable Law requires the payment of a contested Tax as a condition to its being contested, and the Lessee chooses to contest such Tax or (ii) forthwith upon demand to direct the Indemnitee to contest such Tax, then the Lessee shall provide the Indemnitee with the funds to pay such Tax, as a non-interest bearing loan by the Lender if, Lessee to the Indemnitee to be repaid by any recovery of such Tax and any remaining unpaid amount to reduce the obligations to indemnify for such Tax. Lessee shall indemnify the Indemnitee on a grossed-up basis (in accordance with Section 7.5) for and against any adverse tax consequences of such interest-free loan. In the opinion event that the Indemnitee receives a refund (or other like adjustment) in respect of any Tax for which the Lender, and notwithstanding any such contestIndemnitee has been reimbursed by Lessee, the Premises Indemnitee shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if immediately remit the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge amount of such liens; refund to Lessee, net of all costs and expenses incurred by such Indemnitee, together with any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidactually received thereon.
Appears in 1 contract
Contests. Notwithstanding anything If any Claim shall be made against any Indemnitee or if any proceeding shall be commenced against any Indemnitee (including a written notice of such proceeding) for any Taxes as to which Lessees may have an indemnity obligation pursuant to Section 8.1, or if any Indemnitee shall determine that any Taxes as to which Lessees may have an indemnity obligation pursuant to Section 8.1 may be payable, such Indemnitee shall promptly notify Lessees. Lessees shall be entitled, at its expense, acting through counsel reasonably acceptable to such Indemnitee, to participate in, and, to the contrary herein containedextent that Lessees desire to, assume and control the Mortgagor defense thereof; provided, however, that Lessees shall have acknowledged in writing their obligation to indemnify fully such Indemnitee in respect of such action, suit or proceeding; and, provided, further, that Lessees shall not be entitled to assume and control the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to the Lender at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest such action, suit or deposit with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (i) proceeding if and to the extent that (A) Lessees are not able to provide such Indemnitee with a legal opinion of counsel reasonably acceptable to such Indemnitee that such action, suit or proceeding does not involve (x) a risk of imposition of criminal liability or (y) any material risk of material civil liability on such Contested Lien shall be determined adverse to Indemnitee and will not involve a material risk of the Mortgagorsale, forfeiture or loss of, or the creation of any Lien (iiother than a Permitted Lien) forthwith upon demand by on any of the Lender ifLeased Property, any Deed of Trust Estate, the Trust Estate or any part thereof, unless, in the case of this clause (y), Lessees contemporaneously with such opinion shall have posted a bond or other security satisfactory to the relevant Indemnitee in respect to such risk, (B) the control of such action, suit or proceeding would involve a bona fide conflict of interest, (C) such proceeding involves Claims not fully indemnified by Lessees which Lessees and the LenderIndemnitee have been unable to sever from the indemnified claim(s), (D) a Lease Event of Default has occurred and is continuing or (E) such action, suit or proceeding involves matters which extend beyond or are unrelated to the transaction contemplated by the Operative Documents and if determined adversely could be materially detrimental to the interests of such Indemnitee notwithstanding indemnification by Lessees. The Indemnitee, on the one hand, and notwithstanding Lessees and Parent, on the other hand, may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by each other in accordance with the foregoing. Each Indemnitee shall at Lessees' expense supply Lessees with such contestinformation and documents reasonably requested by Lessees as are necessary or advisable for Lessees to participate in any action, suit or proceeding to the Premises extent permitted by this Section 8.3. Unless a Participation Agreement Lease Event of Default shall have occurred and be in jeopardy continuing, no Indemnitee shall enter into any settlement or in danger other compromise with respect to any Claim which is entitled to be indemnified under this Section 8.3 without the prior written consent of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to doLessees, the Lender may, but which consent shall not be required tounreasonably withheld, pay all unless such Contested Liens Indemnitee waives its right to be indemnified under this Section 8.3 with respect to such Claim. In addition, if an Indemnitee, in violation of Lessees' right to assume and Lien Amounts control the defense of any Claim, refuses to permit Lessees to control the defense, such Indemnitee waives its right to be indemnified under Section 8.1 with respect to such Claim.
(a) a Claim with respect to the imposition of any Tax if such Indemnitee shall waive its right to indemnification under this Section 8.3 with respect to such claim (and interest and penalties thereon and such any related claim with respect to other sums taxable years the contest of which is precluded or otherwise adversely affected as may be necessary in the judgment of the Lender to obtain the release and discharge a result of such liens; waiver) and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) any Claim if the subject matter thereof shall be of this Section a continuing nature and may demand payment upon any bond or title indemnity furnished as aforesaidshall have previously been decided adversely. Each Indemnitee and Lessees shall consult in good faith with each other concerning each step and decision regarding the conduct of such contest controlled by either, including the forum in which the claim is most likely to be favorably resolved.
Appears in 1 contract
Contests. Notwithstanding anything Tenant, on its own or on Landlord's behalf (or in Landlord's name), but at Tenant's sole cost and expense, upon Notice to the contrary herein containedLandlord, the Mortgagor shall have the right to contest may contest, by appropriate legal proceedings diligently prosecuted conducted in good faith and with due diligence, without prejudice to Landlord's rights hereunder the amount, validity or application, in whole or in part, of any Taxes imposed Imposition, Legal Requirement, Insurance Requirement, lien, attachment, levy, encumbrance, charge or assessed upon the Premises or which may be or become a lien thereon and any mechanics’claim not otherwise permitted by Article XII, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
provided that (a) The Mortgagor in the case of an unpaid Imposition, lien, attachment, levy, encumbrance, charge or claim, the commencement and continuation of such proceedings shall forthwith give notice of any Contested Lien to suspend the Lender at collection thereof from Landlord and from the time the same shall be asserted;
Property, (b) The Mortgagor shall either pay under protest neither the Property nor any Rent therefrom nor any part thereof or deposit with interest therein would be subject to any risk of being sold, forfeited, attached, foreclosed, or lost, (c) in the Lender case of a Legal Requirement, Landlord would not be in any danger of incurring any lien, charge, fine, penalty, or other civil or criminal liability for failure to comply therewith pending the full amount (the “Lien Amount”) outcome of such Contested Lienproceedings, together with (d) in the event that any such amount as the Lender may reasonably estimate as interest contest shall involve a sum of money or penalties which might arise during the period potential loss in excess of contest; provided that $100,000 then, in lieu of any such payment the Mortgagor may furnish event, Tenant shall deliver to Landlord an Officer's Certificate to the Lender effect set forth in clauses (a), (b) and (c), to the extent applicable, (e) in the case of a bond Legal Requirement or title indemnity in an Imposition, lien, encumbrance or charge, Tenant shall give such amount and form, and issued by a bond or title insuring company, reasonable security as may be satisfactory demanded by Landlord to insure ultimate payment of the Lender;
(c) The Mortgagor shall diligently prosecute the contest of same and to prevent any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure sale or forfeiture of the Premisesaffected portion of the Property or the Rent by reason of such non-payment or non-compliance, which security may be a guaranty in form and substance acceptable to Landlord and executed by a guarantor acceptable to Landlord; provided, however, the provisions of this Article shall not be construed to permit Tenant to contest the payment of Rent (except as to contests concerning the method of computation or the basis of levy of any Imposition) or any other sums payable by Tenant to Landlord hereunder, (f) in the case of an Insurance Requirement, the coverage required by Article XIV shall be maintained, and shall permit (g) if 37 39 such contest be finally resolved against Landlord or Tenant, Tenant shall, as Additional Charges due hereunder, promptly pay the Lender amount required to be represented paid, together with all interest and penalties accrued thereon, or comply with the applicable Legal Requirement or Insurance Requirement. Landlord, at Tenant's expense, shall execute and deliver to Tenant such authorizations and other documents as may reasonably be required in any such contest and, if reasonably requested by Tenant or if Landlord so desires, Landlord shall join as a party therein. Tenant shall indemnify and shall pay all expenses incurredsave Landlord harmless against any liability, cost or expense of any kind that may be imposed upon Landlord in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together connection with interest and penalties thereon (i) if and to the extent that any such Contested Lien shall be determined adverse to the Mortgagor, or (ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; contest and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidloss resulting therefrom.
Appears in 1 contract
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessee may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify the Lessee. The Lessee shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that the Lessee desires to, assume and control the Mortgagor defense thereof; provided, however, that the Lessee shall have acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in respect of such action if requested to do so by the right Lessee, suit or proceeding if the contest is unsuccessful; and, provided further, that the Lessee shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time sole cost and expense of the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit Lessee, on behalf of the Lessee with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iLessee) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless the Lessee shall have posted a bond or other security satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessee or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if the Lessee shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to the Mortgagor, Lessee stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lender if, Lessee in accordance with the opinion of the Lender, and notwithstanding any such contest, the Premises shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not be required to, pay all such Contested Liens and Lien Amounts and interest and penalties thereon and such other sums as may be necessary in the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidforegoing.
Appears in 1 contract
Samples: Master Agreement (Ruby Tuesday Inc)
Contests. Notwithstanding anything If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify Concord. Concord shall be entitled, at its expense, to participate in, and, to the contrary herein containedextent that Concord desires to, assume and control the Mortgagor defense thereof; provided, however, that Concord shall have acknowledged in writing its and each Lessee's obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the right contest is unsuccessful; and, provided further, that Concord shall not be entitled to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon assume and control the Premises or which may be or become a lien thereon and any mechanics’, materialmen’s or other liens or claims for lien upon the Premises (each, a “Contested Lien”), and no Contested Lien shall constitute an Event of Default under this Mortgage, if, but only if:
(a) The Mortgagor shall forthwith give notice defense of any Contested Lien to such action, suit or proceeding (but the Lender Tax Indemnitee shall then contest, at the time the same shall be asserted;
(b) The Mortgagor shall either pay under protest or deposit sole cost and expense of Concord and such other Lessees, on behalf of Concord with the Lender the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Lender may representatives reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Lender a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Lender;
(c) The Mortgagor shall diligently prosecute the contest of any Contested Lien by appropriate legal proceedings having the effect of staying the foreclosure or forfeiture of the Premises, and shall permit the Lender to be represented in any such contest and shall pay all expenses incurred, in so doing, including fees and expenses of the Lender’s counsel (all of which shall constitute so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand);
(d) The Mortgagor shall pay each such Contested Lien and all Lien Amounts together with interest and penalties thereon (iConcord) if and to the extent that that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Contested Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless a Lessee shall have posted a bond or other security reasonably satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessees which Concord and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessees or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee not indemnified by the Lessees. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be determined adverse required to conduct such contest only if Concord shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Mortgagor, Tax Indemnitee and reasonably satisfactory to Concord stating that a reasonable basis exists to contest such claim or (ii) forthwith upon demand by the Lender if, in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the Lendereffect that such appeal is more likely than not to be successful, and notwithstanding any provided, however, such contest, the Premises Tax Indemnitee shall be in jeopardy or in danger of being forfeited or foreclosed; provided that if the Mortgagor shall fail so to do, the Lender may, but shall not no event be required to, pay all such Contested Liens to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and Lien Amounts and interest and penalties thereon and such other sums as may be necessary with its own counsel in any proceeding conducted by Concord in accordance with the judgment of the Lender to obtain the release and discharge of such liens; and any amount expended by the Lender in so doing shall be so much additional Indebtedness bearing interest at the Default Rate until paid, and payable upon demand; and provided further that the Lender may in such case use and apply monies deposited as provided in paragraph (b) of this Section and may demand payment upon any bond or title indemnity furnished as aforesaidforegoing.
Appears in 1 contract
Samples: Master Agreement (Concord Efs Inc)
