connection with such contest and shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax or federal, state and local income and employment tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this subparagraph (e), Calpine shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct you to pay the tax claimed and sue for a refund or to contest the claim in any permissible manner, and you agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Calpine shall determine; provided, however, that if Calpine directs you to pay such claim and sue for a refund, Calpine shall advance the amount of such payment to you, on an after-tax basis, and shall hold you harmless from any Excise Tax or federal, state or local income or employment tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to your payment of taxes for the taxable year with respect to with such contested amount is claimed to be due is limited solely to such contested amount. The Company’s control of the contest, however, shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and you shall be entitled to settle or contest, as the case may be, any other issue raised by the IRS or any other taxing authority. If, after your receipt of an amount advanced by Calpine pursuant to this subparagraph, you become entitled to receive any refund with respect to such claim, you shall (subject to Calpine’s complying with the requirements of this subparagraph) promptly pay to Calpine the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto); provided, however, that if Calpine determines that such repayment obligation would be or result in an unlawful extension of credit under Section 13(k) of the Exchange Act, repayment shall not be required. If, after your receipt of an amount advanced by Calpine pursuant to this subparagraph, a determination is made that you shall not be entitled to any refund with respect to any such claim and Calpine does not notify you in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.
(f) If, other than in the circumstances described in subparagraph (a), it is determined that any of the 280G Payments would be subject to the Excise Tax, then, to the extent necessary to make such portion of the 280G Payments not