Common use of Tax Audits and Contests Clause in Contracts

Tax Audits and Contests. In the case of any audit, claim or refund, voluntary disclosure agreement process or administrative or judicial proceeding involving any asserted Tax liability or refund with respect to the Company (all of which hereinafter referred to as a “Contest”) that relates to an S Corporation Income Tax Return or a Covered Tax Matter, Significant Shareholder shall control the conduct of such Contest. Significant Shareholder shall be entitled to settle, compromise and/or concede such Contest, provided, however, that Significant Shareholder shall not be able to settle, compromise and/or concede any portion of such Contest that is reasonably likely to materially affect the Tax liability of Company for any taxable year (or portion thereof) beginning on or after the Closing Date (a “Post-Closing Tax Consequence”) without the written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned. In the case of a Contest that relates to a straddle period (other than any Contest that relates to an S Corporation Income Tax Return), Purchaser shall be entitled to control such Contest. Significant Shareholder shall have the right to participate in any portion of such Contest that relates to the portion of the straddle period ending on the Closing Date at its own expense. Notwithstanding the foregoing, the Significant Shareholder shall only have the right to control a Contest as provided in this Section 6.5(g), if the Significant Shareholder first acknowledges to Purchaser, in writing, its obligation to indemnify Purchaser for any Taxes of the Company (other than Taxes attributable to a Post-Closing Tax Consequence) due as a result of such Contest and demonstrates her ability to satisfy liabilities arising from such obligation; provided, that if the Significant Shareholder does not provide such acknowledgement and demonstrate such ability, the Significant Shareholder shall nonetheless be entitled to participate in such Contest at Significant Shareholder’s sole cost and expense. For the avoidance of doubt, the preceding sentence shall not apply to (i.e., the Significant Shareholder need not acknowledge an obligation to indemnify Purchaser for) income Taxes payable by the stockholders of the Company as a result of the Company being an S corporation for federal or state income tax purposes prior to the Closing or for a Covered Tax Matter to the extent of the remaining Escrow Funds. For the further avoidance of doubt, all Contests involving Taxes other than with respect to (i) an S Corporation Income Tax Return, (ii) Covered Tax Matters and (iii) straddle periods shall be subject to the provisions of Article IX.

Tax Audits and Contests. In (i) Unless Purchaser has previously received notice from the case Members’ Representative of the existence of any auditTax Contest (as defined below), claim Purchaser will, or refundwill cause the Company to, voluntary disclosure agreement process promptly notify the Members’ Representative of any inquiries, claims, assessments, audits or administrative or judicial proceeding involving any asserted Tax liability or refund similar events with respect to Taxes relating to a Pre-Closing Tax Period or a Straddle Period for which the Company Members may be liable under this Agreement (all of which hereinafter referred to as such inquiry, claim, assessment, audit or similar event, a “Tax Contest”) that relates to an S Corporation Income Tax Return or a Covered Tax Matter, Significant Shareholder shall control the conduct of such Contest. Significant Shareholder shall be entitled to settle, compromise and/or concede such Contest, ); provided, however, that Significant Shareholder shall no failure to give such notice will relieve the Members of any liability hereunder except to the extent, if any, that the rights of the Members with respect to such claim are materially actually prejudiced thereby. Except with respect to income Tax Returns (or information Tax Returns related to income Taxes) for taxable periods of the Company or the Company Subsidiaries ending on or before the Closing Date, Purchaser will have the authority to represent the interests of the Company and will have control of the defense, compromise or other resolution of any Tax Contest; provided, however, that the Members’ Representative will be entitled to participate in such Tax Contest at the Members’ expense and Purchaser will not be able to settle, compromise and/or concede any portion of such Tax Contest that is reasonably likely to materially affect the Tax liability of the Company, its Subsidiaries or the Members for any Pre-Closing Tax Period without the written consent of Members’ Representative, which consent will not be unreasonably withheld, delayed or conditioned. The Members’ Representative will have the authority, at the Members’ expense, to represent the interests of the Company, its Subsidiaries and the Members and will have control of the defense, compromise or other resolution of any Tax Contest to the extent such Tax Contest involves Tax Returns (or information Tax Returns) related to income Taxes or Taxes in the nature of Taxes on net income for taxable periods of the Company or its Subsidiaries ending on or before the Closing Date; provided, however, that Purchaser will be entitled to participate in such Tax Contest at its own expense and the Members’ Representative will not settle, compromise and/or concede any portion of such Tax Contest that is reasonably likely to materially affect the Tax liability of the Company, its Subsidiaries or Purchaser for any taxable year period (or portion thereof) beginning on or occurring after the Closing Date (a “Post-Closing Tax Consequence”) without the written consent of Purchaser, which consent shall will not be unreasonably withheld, delayed or conditioned. In the case of a Contest that relates to a straddle period (other than any Contest that relates to an S Corporation Income Tax Return), Purchaser shall be entitled to control such Contest. Significant Shareholder shall have the right to participate in any portion of such Contest that relates to the portion of the straddle period ending on the Closing Date at its own expense. Notwithstanding the foregoing, the Significant Shareholder shall only have the right to control a Contest as provided in this Section 6.5(g), if the Significant Shareholder first acknowledges to Purchaser, in writing, its obligation to indemnify Purchaser for any Taxes of the Company (other than Taxes attributable to a Post-Closing Tax Consequence) due as a result of such Contest and demonstrates her ability to satisfy liabilities arising from such obligation; provided, that if the Significant Shareholder does not provide such acknowledgement and demonstrate such ability, the Significant Shareholder shall nonetheless be entitled to participate in such Contest at Significant Shareholder’s sole cost and expense. For the avoidance of doubt, the preceding sentence shall not apply to (i.e., the Significant Shareholder need not acknowledge an obligation to indemnify Purchaser for) income Taxes payable by the stockholders of the Company as a result of the Company being an S corporation for federal or state income tax purposes prior to the Closing or for a Covered Tax Matter to the extent of the remaining Escrow Funds. For the further avoidance of doubt, all Contests involving Taxes other than with respect to (i) an S Corporation Income Tax Return, (ii) Covered Tax Matters and (iii) straddle periods shall be subject to the provisions of Article IX.

Tax Audits and Contests. In (i) Unless Parent has previously received notice from the case Securityholders’ Representative of the existence of any auditTax Contest (as defined below), claim Parent will, or refundwill cause the Company to, voluntary disclosure agreement process promptly notify the Securityholders’ Representative of any inquiries, claims, assessments, audits or administrative or judicial proceeding involving any asserted Tax liability or refund similar events with respect to Taxes relating to a Pre-Closing Tax Period or a Straddle Period for which the Company or any of the Company Subsidiaries or the Company Securityholders may be liable under this Agreement (all of which hereinafter referred to as such inquiry, claim, assessment, audit or similar event, a “Tax Contest”) that relates to an S Corporation Income Tax Return or a Covered Tax Matter, Significant Shareholder shall control the conduct of such Contest. Significant Shareholder shall be entitled to settle, compromise and/or concede such Contest, ); provided, however, that Significant Shareholder shall no failure to give such notice will relieve the Company Securityholders of any liability hereunder except to the extent, if any, that the rights of the Company Securityholders with respect to such claim are materially actually prejudiced thereby. Except with respect to income Tax Returns (or information Tax Returns related to income Taxes) for taxable periods of the Company ending on or before the Closing Date, Parent will have the authority to represent the interests of the Company and will have control of the defense, compromise or other resolution of any Tax Contest; provided, however, that the Securityholders’ Representative will be entitled to participate in such Tax Contest at the Company Securityholders’ expense and Parent will not be able to settle, compromise and/or concede any portion of such Tax Contest that is reasonably likely to materially affect the Tax liability of the Company, the Company Subsidiaries, or the Company Securityholders for any taxable year (or portion thereof) beginning on or after the Closing Date (a “PostPre-Closing Tax Consequence”) Period, or to form the basis for a claim of indemnification pursuant to Section 8.1(b), without the written consent of PurchaserSecurityholders’ Representative, which consent shall will not be unreasonably withheld, delayed or conditioned. In the case of a Contest that relates to a straddle period (other than any Contest that relates to an S Corporation Income Tax Return), Purchaser shall be entitled to control such Contest. Significant Shareholder shall The Securityholders’ Representative will have the right authority, at the Company Securityholders’ expense, to participate in represent the interests of the Company, the Company Subsidiaries, and the Company Securityholders and will have control of the defense, compromise or other resolution of any portion of such Tax Contest that relates to the portion extent that such Tax Contest involves Tax Returns (or information Tax Returns) related to income Taxes or Taxes in the nature of the straddle period ending Taxes on the Closing Date at its own expense. Notwithstanding the foregoing, the Significant Shareholder shall only have the right to control a Contest as provided in this Section 6.5(g), if the Significant Shareholder first acknowledges to Purchaser, in writing, its obligation to indemnify Purchaser net income for any Taxes taxable periods of the Company (other than Taxes attributable to a Post-or any of the Company Subsidiaries ending on or before the Closing Tax Consequence) due as a result of such Contest and demonstrates her ability to satisfy liabilities arising from such obligationDate; provided, however, that if the Significant Shareholder does not provide such acknowledgement and demonstrate such ability, the Significant Shareholder shall nonetheless Parent will be entitled to participate in such Tax Contest at Significant Shareholder’s sole cost its own expense and expense. For the avoidance Securityholders’ Representative will not settle, compromise and/or concede any portion of doubt, such Tax Contest that is reasonably likely to materially affect the preceding sentence shall not apply to (i.e., the Significant Shareholder need not acknowledge an obligation to indemnify Purchaser for) income Taxes payable by the stockholders Tax liability of the Company as a result of the Company being an S corporation or Parent for federal any taxable period (or state income tax purposes prior to portion thereof) occurring after the Closing Date without the written consent of Parent, which consent will not be unreasonably withheld, delayed or for a Covered Tax Matter to the extent of the remaining Escrow Fundsconditioned. For the further avoidance of doubt, all Contests involving Taxes other than with respect to (i) an S Corporation Income Tax Return, (ii) Covered Tax Matters and (iii) straddle periods shall be subject to the provisions of Article IX.57

Tax Audits and Contests. In (i) Unless Parent has previously received notice from the case Securityholders’ Representative of the existence of any auditTax Contest (as defined below), claim Parent will, or refundwill cause the Company to, voluntary disclosure agreement process promptly notify the Securityholders’ Representative of any inquiries, claims, assessments, audits or administrative or judicial proceeding involving any asserted Tax liability or refund similar events with respect to Taxes relating to a Pre-Closing Tax Period or a Straddle Period for which the Company may be liable under this Agreement (all of which hereinafter referred to as such inquiry, claim, assessment, audit or similar event, a “Tax Contest”) that relates to an S Corporation Income Tax Return or a Covered Tax Matter, Significant Shareholder shall control the conduct of such Contest. Significant Shareholder shall be entitled to settle, compromise and/or concede such Contest, ); provided, however, that Significant Shareholder shall no failure to give such notice will relieve the Company Securityholders of any liability hereunder except to the extent, if any, that the rights of the Company Securityholders with respect to such claim are materially prejudiced thereby. Except with respect to income Tax Returns (or information Tax Returns related to income Taxes) for taxable periods of the Company or the Company Subsidiaries ending on or before the Closing Date, Parent will have the authority to represent the interests of the Company and will have control of the defense, compromise or other resolution of any Tax Contest; provided, however, that the Securityholders’ Representative will be entitled to participate in such Tax Contest at the Company Securityholders’ expense and Parent will not be able to settle, compromise and/or concede any portion of such Tax Contest that could materially affect the Tax liability of the Company, the Company Subsidiaries or the Company Securityholders for any Pre-Closing Tax Period (or otherwise form the basis for a claim of indemnification pursuant to Section 8.1(b)) without the written consent of Securityholders’ Representative, which consent will not be unreasonably withheld, delayed or conditioned. The Securityholders’ Representative will have the authority, at the Company Securityholders’ expense, to represent the interests of the Company, the Company Subsidiaries and the Company Securityholders and will have control of the defense, compromise or other resolution of any Tax Contest to the extent that such Tax Contest involves Tax Returns (or information Tax Returns) related to income Taxes or Taxes in the nature of Taxes on net income for taxable periods of the Company or the Company Subsidiaries ending on or before the Closing Date; provided, however, that Parent will be entitled to participate in such Tax Contest at its own expense and the Securityholders’ Representative will not settle, compromise and/or concede any portion of such Tax Contest that is reasonably likely to materially affect the Tax liability of the Company, the Company Subsidiaries or Parent for any taxable year period (or portion thereof) beginning on or occurring after the Closing Date (a “Post-Closing Tax Consequence”) without the written consent of PurchaserParent, which consent shall will not be unreasonably withheld, delayed or conditioned. In the case of a Contest that relates to a straddle period (other than any Contest that relates to an S Corporation Income Tax Return), Purchaser shall be entitled to control such Contest. Significant Shareholder shall have the right to participate in any portion of such Contest that relates to the portion of the straddle period ending on the Closing Date at its own expense. Notwithstanding the foregoing, the Significant Shareholder shall only have the right to control a Contest as provided in this Section 6.5(g), if the Significant Shareholder first acknowledges to Purchaser, in writing, its obligation to indemnify Purchaser for any Taxes of the Company (other than Taxes attributable to a Post-Closing Tax Consequence) due as a result of such Contest and demonstrates her ability to satisfy liabilities arising from such obligation; provided, that if the Significant Shareholder does not provide such acknowledgement and demonstrate such ability, the Significant Shareholder shall nonetheless be entitled to participate in such Contest at Significant Shareholder’s sole cost and expense. For the avoidance of doubt, the preceding sentence shall not apply to (i.e., the Significant Shareholder need not acknowledge an obligation to indemnify Purchaser for) income Taxes payable by the stockholders of the Company as a result of the Company being an S corporation for federal or state income tax purposes prior to the Closing or for a Covered Tax Matter to the extent of the remaining Escrow Funds. For the further avoidance of doubt, all Contests involving Taxes other than with respect to (i) an S Corporation Income Tax Return, (ii) Covered Tax Matters and (iii) straddle periods shall be subject to the provisions of Article IX.