Common use of Grossing-up of indemnity payments Clause in Contracts

Grossing-up of indemnity payments. 8.4.1 If and to the extent that any amount payable to the Lessor or any Lessor Group Member by or on behalf of the Lessee under this Agreement or any of the other Transaction Documents by way of indemnity proves, by reason of that sum being taxable in the hands of the Lessor or, as the case may be, any Lessor Group Member, to be insufficient for the Lessor to discharge the corresponding liability to a third party or to reimburse the Lessor or such Lessor Group Member for the cost incurred by it in discharging the corresponding liability to a third party, the Lessee shall pay to the Lessor or the applicable Lessor Group Member such additional amount as, after taking into account any Tax suffered by the Lessor in respect of that sum, is required to make up the insufficiency. 8.4.2 There shall be taken into account, in determining whether any amount referred to in clause 8.4.1 is insufficient, the amount of any deduction or other relief, allowance or credit received by the Lessor in respect of the Lessor’s corresponding liability to a third party or the cost incurred by the Lessor in discharging the corresponding liability to a third party to the extent that the Lessor determines that such deduction or other relief, allowance or credit confers a genuine benefit on the Lessor. 8.4.3 If and to the extent that any amount (the “indemnity amount”) constituting (directly or indirectly) an indemnity by the Lessee to the Lessor, but paid by the Lessee under this Agreement or any of the other Transaction Documents to any person other than the Lessor, shall be treated as taxable in the hands of the Lessor the Lessee shall pay to the Lessor such amount (the “compensating amount”) as (after taking into account any Tax suffered by the Lessor in respect of the compensating amount) shall reimburse the Lessor for any Tax suffered by it in respect of the indemnity amount. 8.4.4 There shall be taken into account in determining the amount of any compensating amount under clause 8.4.3 the amount and time of payment of any deduction or other relief, allowance or credit available to the Lessor in respect of the Lessor’s corresponding liability or Losses in respect of which the indemnity amount is paid to the extent that the Lessor determines that such deduction or other relief, allowance or credit confers a genuine benefit on the Lessor. 8.4.5 To the extent that liability arises under clause 8.4.1 which may lawfully be avoided by the Lessee discharging the Lessor’s liability directly, then the parties shall endeavour to settle their respective liabilities in this manner.