Common use of Definition of Loss Clause in Contracts

Definition of Loss. The Owner Participant shall have suffered a “Tax Loss” for purposes of this Agreement if the Owner Participant: (i) shall suffer a delay in claiming, shall not have the right to claim or shall not claim (in each case, after receiving a written opinion of independent tax counsel selected by the Owner Participant and reasonably acceptable to EME to the effect that as a result of a change in (or newly discovered) facts subsequent to the Closing Date (or, with respect to a modification, substitution or replacement or rebuilding of the Facility or any portion thereof, any Tax Law Change enacted, adopted, promulgated or decided on or after the Closing Date) there is no Reasonable Basis to make such claim), or shall lose, suffer a disallowance of or be required to recapture all or any portion of the Assumed Deductions (a “Deduction Loss”) subject, in each instance, to the exclusions set forth in Section 7 below, or (ii) shall be required by the IRS to include in its gross income an amount (to the extent not offset by deductions of the same character (to the extent, if any, that the character of such deductions is relevant for purposes hereof) in the taxable year of the Owner Participant in which such amounts are included in income) not described under the Tax Assumptions (collectively “Inclusion Losses”), subject, in each instance, to exclusions set forth in Section 7 below (together with Deduction Losses, “Tax Losses”).