Common use of Contests; Refunds Clause in Contracts

Contests; Refunds. (i) In the event a taxing jurisdiction makes ----------------- a claim with respect to any Tax for which a Charterer may be liable under this Section 13.2 (a "Tax Claim"), the Charterer may cause the applicable Tax --- ----- Indemnitee to contest such Tax Claim as set forth herein. In the event any Tax Indemnitee receives notice of a Tax Claim or potential Tax Claim which may be indemnified under this Section 13.2, such Tax Indemnitee shall promptly notify the Charterer thereof. If requested by the Charterer in writing within 30 days of receipt of such notice (or, if sooner, on or before the last date upon which the contest of such Tax can be initiated, provided that the Tax Indemnitee's notice to the Charterer discloses such date), such Tax Indemnitee shall, upon receipt of an indemnity satisfactory to it for all reasonable costs, expenses, losses, legal and accountants' fees and disbursements, and for all penalties, fines, additions to tax and interest, and at the expense of the Charterer, contest the imposition of any Tax Claim by (1) resisting payment thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriate, (2) not paying the same except under protest, if protest is necessary and proper, or (3) if payment shall be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, or both; provided, however, that in no event will such Tax -------- ------- Indemnitee be required to contest or continue to contest any Tax Claim unless such Tax Indemnitee and the Owner Participant shall have reasonably determined that the action to be taken will not result in any material risk of sale, forfeiture or loss of, or the creation of any lien (except if the Charterer shall have adequately bonded such lien, or otherwise made provision to protect the interests of such Tax Indemnitee and the Owner Participant in a manner reasonably satisfactory to such Tax Indemnitee and the Owner Participant) on, the Vessel Interest, any part thereof or interest therein. If such contest shall involve payment of the Tax Claim, the Charterer shall have advanced to such Tax Indemnitee the amount of such payment plus interest, penalties and additions to tax with respect thereto on an interest-free basis, and shall have agreed to indemnify the Tax Indemnitee, on an After-Tax Basis, for any adverse tax consequences resulting from such advance. If permitted by applicable law, the Charterer may contest, at its own expense, the imposition of any Tax Claim if the proviso in the second preceding sentence is satisfied. In any contest controlled by the Tax Indemnitee, such Tax Indemnitee will consult with the Charterer and permit the Charterer to participate in a reasonable manner in the conduct of the contest. A Tax Indemnitee shall not make, accept or enter into a settlement or other compromise with respect to any Taxes indemnified pursuant to this Section 13.2 (which proceeding the Tax Indemnitee is required to continue), or forego or terminate any such proceeding with respect to Taxes indemnified pursuant to this Section 13.2, without the prior written consent of the Charterer. Notwithstanding the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim or effects a settlement or compromise of any such Tax that the Tax Indemnitee is required to contest or otherwise terminates any such contest without such prior written consent of the Charterer, such Tax Indemnitee shall be deemed to have waived its right to any indemnity payment by the Charterer that would otherwise be payable by the Charterer pursuant to this Section 13.2 in respect of such Tax Claim.

Contests; Refunds. (i) In the event a taxing jurisdiction makes ----------------- a claim with respect to any Tax for which a Charterer may be the Lessee is liable under this Section 13.2 12.2 (a "Tax Claim"), the Charterer Lessee may cause the applicable Tax --- ----- Indemnitee to contest such Tax Claim as set forth herein. In the event any Tax Indemnitee receives notice of a Tax Claim or potential Tax Claim which may be indemnified is indemnifiable under this Section 13.212.2, such Tax Indemnitee shall promptly notify the Charterer Lessee thereof, but the failure to give such notice shall not diminish the Lessee's obligation hereunder, except to the extent that the Lessee's right to contest such Tax Claim or potential Tax Claim is foreclosed thereby, unless the Tax Indemnitee delivers an opinion of independent tax counsel that no reasonable basis exists for the Tax Indemnitee to prevail (except if the Lessee shall have provided to the Tax Indemnitee at the Lessee's sole expense an opinion of the Lessee's independent tax counsel, such tax counsel being reasonably acceptable to the Tax Indemnitee, to the effect that a reasonable basis exists for such contest). If requested by the Charterer Lessee in writing within 30 days of receipt of such notice (or, if sooner, on or before the last date upon which the contest of such Tax can practicably be initiatedinitiated in good faith, provided that the Tax Indemnitee's notice to the Charterer Lessee discloses such date), such Tax Indemnitee shall, upon receipt of provided that (I) it has received an indemnity satisfactory to it for whereby the Lessee shall have agreed to pay and shall pay to such Tax Indemnitee on an After-Tax Basis all reasonable costs, expenses, losses, legal and accountants' fees and disbursements, and for all penalties, fines, additions to tax and interestinterest in connection with contesting such Tax Claim and (II) no Lease Event of Default or Lease Default described in Section 15(a), (b), (c), (f) or (g) of the Lease shall have occurred and be continuing, and at the expense of the ChartererLessee, contest or permit the Lessee to contest the imposition of any Tax Claim by (1) resisting payment thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriate, (2) not paying the same except under protest, if protest is necessary and proper, or (3) if payment shall be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, or both; provided, however, that (i) in no event will such Tax -------- ------- Indemnitee be required to contest or permit a contest or continue to contest any Tax Claim unless such Tax Indemnitee and the Owner Participant shall have reasonably determined that the action to be taken will not result in (a) any material risk of sale, forfeiture or loss of, or the creation of any lien (except if the Charterer Lessee shall have adequately bonded such lien, or otherwise made provision to protect the interests of such Tax Indemnitee and the Owner Participant in a manner reasonably satisfactory to such Tax Indemnitee and the Owner Participant) on, the Vessel Undivided Interest, any part thereof or interest therein. If therein or (b) any risk of criminal penalties and (ii) if such contest shall involve payment of the Tax Claim, the Charterer Lessee shall have advanced to such Tax Indemnitee the amount of such payment plus interest, penalties and additions to tax with respect thereto on an interest-free basis, and shall have agreed to indemnify the Tax Indemnitee, on an After-Tax Basis, for any adverse tax consequences resulting from such advance. If permitted by applicable law, the Charterer Lessee may contest, at its own expense, the imposition of any Tax Claim if (i) the proviso in the second preceding sentence is satisfied, (ii) such claim involves only Taxes for which the Lessee is liable to the taxing authority, (iii) the Lessee shall have delivered to the Tax Indemnitee a written acknowledgment of its liability under this Section 12.2 for such Taxes (provided, however, that the Lessee will not be bound by its acknowledgment of liability if the contest is resolved on the basis of a written decision of the adjudicator that clearly indicates the basis for the conclusion that the Lessee has no liability under this Section 12.2 with respect to such Tax, unless the Lessee's conduct of the contest has materially prejudiced the Tax Indemnitee), (iv) the participation of the Tax Indemnitee is not required, (v) no Tax return of the Tax Indemnitee is held open as a result of such contest, and (vi) the Tax Indemnitee may not be reasonably viewed as having actual or potential liability for Taxes not indemnifiable by the Lessee hereunder relating to the contest. In any contest controlled by a Tax Indemnitee, the Tax Indemnitee shall consult in good faith with the Lessee concerning the method and forum of such contest, but the Tax Indemnitee shall retain the ultimate control over such contest. The Lessee shall have control over any contest conducted by the Lessee pursuant to the terms hereof, but shall consult in good faith with the Tax Indemnitee concerning the method and forum of such contest. The Lessee shall keep the Tax Indemnitee fully informed as to the nature, conduct and results of any contest conducted in the name of the Tax Indemnitee. Notwithstanding anything contained in this Section 12.2 to the contrary, no Tax Indemnitee shall be required to contest any Tax Claim (in a proceeding that involves taxes unrelated to the transactions contemplated by the Operative Documents) unless such Tax Indemnitee will consult with shall have received an opinion of such independent tax counsel as may be selected by the Charterer Tax Indemnitee and permit reasonably acceptable to the Charterer Lessee, furnished at the Lessee's sole expense, to participate in the effect that there is a reasonable manner in the conduct of the contestbasis to contest such Tax Claim. A Tax Indemnitee shall not make, accept or enter into a settlement or other compromise with respect to any Taxes indemnified pursuant to this Section 13.2 12.2 (which proceeding the Tax Indemnitee is required to continue), or forego or terminate any such proceeding with respect to Taxes indemnified pursuant to this Section 13.212.2, without the prior written consent of the ChartererLessee provided that the Lessee shall have acknowledged that the contest is with respect to a Tax Claim that would result in a Tax indemnifiable under this Section 12.2. Notwithstanding the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim or effects a settlement or compromise of any such Tax that the Tax Indemnitee is required to contest or is required not to settle or compromise or otherwise terminates any such contest in violation of the terms hereof without such prior written consent of the ChartererLessee (but not with respect to any reasonable out-of-pocket costs and expenses incurred by the Tax Indemnitee to contest such Tax Claim), such Tax Indemnitee shall be deemed to have waived its right to any indemnity payment by the Charterer Lessee that would otherwise be payable by the Charterer Lessee pursuant to this Section 13.2 12.2 in respect of such Tax ClaimClaim and any other tax claim the contest of which may be effectively precluded by such settlement or compromise, and shall have no further obligation or liability to the Lessee with respect to such contest or settlement. Notwithstanding anything contained in this Section 12.2 to the contrary, the Tax Indemnitee shall not be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely by a court of competent jurisdiction pursuant to the contest provisions of this Section 12.2, 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 the Tax Indemnitee shall have received, at the Lessee's expense, an opinion of independent tax counsel selected by the Lessee and reasonably acceptable to such Tax Indemnitee to the effect that as a result of such change in law (or interpretation thereof) or a change in facts, there is substantial authority (applying the principles of Section 6662(d) of the Code and the Treasury Regulations thereunder) for the position asserted by the Tax Indemnitee in such contest.

Contests; Refunds. (i) In the event If a taxing jurisdiction makes ----------------- a written claim with respect to is made against any Tax Indemnitee for any Tax for which a Charterer Lessee may be liable under obligated pursuant to this Section 13.2 (a "Tax Claim"), the Charterer may cause the applicable Tax --- ----- Indemnitee to contest such Tax Claim as set forth herein. In the event any Tax Indemnitee receives notice of a Tax Claim or potential Tax Claim which may be indemnified under this Section 13.27.2, such Tax Indemnitee shall promptly notify the Charterer thereofLessee in writing of such claim. If requested by Lessee in writing, Lessee shall, subject to the Charterer conditions set forth in writing within 30 days the next paragraph, be entitled at its sole expense to contest such Tax in the name of receipt the relevant Tax Indemnitee or of Lessee through appropriate administrative and judicial proceedings (including pursuing all judicial appeals); provided that (a) no Event of Default under Section 14(a), (b), (f), (g), (h) or (i) of the Lease shall have occurred and be continuing, (b) if such notice (orcontest shall be conducted in a manner requiring the payment of the Tax, if sooner, on Lessee shall advance to or before for the last date upon which the contest benefit of such Tax can be initiated, provided that Indemnitee (on an interest-free basis) the Tax Indemnitee's notice amount of such payment and shall agree to the Charterer discloses such date), indemnify such Tax Indemnitee shallagainst any adverse tax consequences to such Tax Indemnitee resulting from such interest-free loan and (c) the action to be taken will not result in any material danger of forfeiture, upon receipt of an indemnity satisfactory to it for all reasonable costs, expenses, losses, legal and accountants' fees and disbursements, and for all penalties, fines, additions to tax and interest, and at the expense sale or loss of the ChartererAircraft, contest the Airframe or any Engine (unless Lessee shall have provided to Owner Trustee a bond or other sufficient protection against such risk reasonably acceptable to Owner Trustee) or any material risk of the imposition of criminal penalties. In any contest under this Section 7.2.4 conducted by Lessee, Lessee shall determine the forum and manner in which such contest shall be conducted and, upon the written request of the relevant Tax Claim Indemnitee, shall advise such Tax Indemnitee of the status of such contest, and each Tax Indemnitee shall take reasonable steps to cooperate with Lessee, at Lessee’s request and expense, in connection with such contest. Lessee shall not be permitted to conduct such a contest in its name or in the name of the relevant Tax Indemnitee (and instead a Tax Indemnitee, at Lessee’s request, shall contest in its own name as provided in the next paragraph) if (x) an Event of Default under Section 14(a), (b), (f), (g), (h) or (i) of the Lease shall have occurred and be continuing or (y) such contest involves issues for which Lessee is not obligated under this Section 7.2 that can not be severed by reasonable efforts of the Tax Indemnitee from all issues for which Lessee might be so obligated. If requested by Lessee in writing, and if Lessee is not itself contesting a claim under this Section 7.2.4, the relevant Tax Indemnitee shall contest, diligently and in good faith, in the name of such Tax Indemnitee the validity, applicability and amount of the relevant Tax by (1I) resisting payment thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriate, (2II) not paying the same except under protest, if protest is be necessary and or proper, or (3III) if payment shall be made, using reasonable efforts to promptly obtain a refund thereof in appropriate administrative and judicial proceedings, or both; provided, however, provided that in no event will such Tax -------- ------- Indemnitee be required (1) Lessee shall have agreed to contest or continue to contest any Tax Claim unless pay such Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim, including, without limitation, all reasonable legal, accountants’ and investigatory fees and disbursements, (2) if such contest shall be conducted in a manner requiring the Owner Participant payment of the Tax, Lessee shall have reasonably determined that advance to such Tax Indemnitee (on an interest-free basis) the amount of such payment and shall agree to indemnify such Tax Indemnitee against any adverse tax consequences to such Tax Indemnitee LA 1 – Participation Agreement [Participation Agreement ([Year] MSN [MSN])] resulting from such interest-free loan, (3) the action to be taken will not result in any material risk danger of saleforfeiture, forfeiture sale or loss ofof the Aircraft, the Airframe or the creation of any lien Engine or Part (except if the Charterer unless Lessee shall have adequately bonded provided to Owner Trustee a bond or other sufficient protection against such lienrisk reasonably acceptable to Owner Trustee) and (4) if an Event of Default shall have occurred and be continuing, or otherwise made provision to protect the interests of such Tax Indemnitee and the Owner Participant in a manner Lessee shall have provided security for its related tax indemnity obligation reasonably satisfactory acceptable to such Tax Indemnitee and the Owner Participant) on, the Vessel Interest, any part thereof or interest therein. If such contest shall involve payment of the Tax Claim, the Charterer shall have advanced to such Tax Indemnitee the amount of such payment plus interest, penalties and additions to tax with respect thereto on an interest-free basis, and shall have agreed to indemnify the Tax Indemnitee, on an After-Tax Basis, for any adverse tax consequences resulting from such advance. If permitted by applicable law, the Charterer may contest, at its own expense, the imposition of any Tax Claim if the proviso in the second preceding sentence is satisfied. In any contest controlled under this Section 7.2.4 conducted by the a Tax Indemnitee, such Tax Indemnitee will consult with shall determine the Charterer forum for such contest and permit the Charterer to participate in a reasonable manner in the conduct of the contest. A which it shall be conducted; provided that such Tax Indemnitee shall not makeconsult in good faith with Lessee and its counsel, accept and provide to Lessee and its counsel any communications to or enter into a settlement from the relevant taxing authority or other compromise administrative or judicial body, with respect to any Taxes indemnified pursuant to the issues for which Lessee may be obligated under this Section 13.2 7.2. If a refund (which proceeding the whether in cash or in any other form) shall be obtained by or for any Tax Indemnitee is required to continue)of all or part of any Tax paid by Lessee or for which Lessee shall have made an advance to, or forego or terminate any such proceeding with respect to Taxes indemnified pursuant to this Section 13.2reimbursed, without the prior written consent of the Charterer. Notwithstanding the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim or effects a settlement or compromise of any such Tax that the Tax Indemnitee is required to contest or otherwise terminates any such contest without such prior written consent of the ChartererIndemnitee, such Tax Indemnitee shall promptly pay Lessee an amount equal to the amount of such refund (which shall reduce the amount of any interest-free loan previously made by Lessee under this Section 7.2.4), together with any interest received on such refund attributable to such Tax that is properly attributable to the period subsequent to such payment or reimbursement by Lessee, reduced by any Taxes payable by such Tax Indemnitee as a result of the receipt or accrual of such refund and interest, and increased by any Tax benefit realized by such Tax Indemnitee as a result of any payment by such Tax Indemnitee pursuant to this sentence; provided that the subsequent loss of a refund for which payment has been made to Lessee under this paragraph shall be deemed treated as an indemnifiable Tax hereunder without regard to have waived its the exclusions set forth in Section 7.2.2. If, without the consent of Lessee, a Tax Indemnitee elects not to, or fails to, contest or cooperate in the contest of any Tax as required in accordance with this Section 7.2.4, or elects to settle, compromise or otherwise terminate any such contest, such election or failure shall constitute a waiver by each Tax Indemnitee of any right to any indemnity payment by the Charterer amount that would might otherwise be payable by the Charterer Lessee pursuant to this Section 13.2 in 7.2 with respect to such Tax (and any other Tax for which a successful contest is materially adversely affected because of such election or failure), other than any expenses of the contest, and, if Lessee has theretofore provided such Tax ClaimIndemnitee with an interest-free loan to pay such amount, such Tax Indemnitee shall promptly repay an amount which, after subtraction of any further net savings of Taxes actually realized by such Tax Indemnitee as a result of such repayment, shall be equal to the amount of such interest-free loan, together with interest on the amount of such loan from the date such loan was made to the date of repayment pursuant to this sentence at the rate that would have been paid by the relevant taxing authority had such contest resulted in a refund.

Contests; Refunds. (i) In the event If a taxing jurisdiction makes ----------------- a written claim with respect to is made against any Tax Indemnitee for any Tax for which a Charterer Lessee may be liable under obligated pursuant to this Section 13.2 (a "Tax Claim"), the Charterer may cause the applicable Tax --- ----- Indemnitee to contest such Tax Claim as set forth herein. In the event any Tax Indemnitee receives notice of a Tax Claim or potential Tax Claim which may be indemnified under this Section 13.27.2, such Tax Indemnitee shall promptly notify the Charterer thereofLessee in writing of such claim. If requested by Lessee in writing, Lessee shall, subject to the Charterer conditions set forth in writing within 30 days the next paragraph, be entitled at its sole expense to contest such Tax in the name of receipt the relevant Tax Indemnitee or of Lessee through appropriate administrative and judicial proceedings (including pursuing all judicial appeals); provided that (a) no Event of Default under Section 14(a), (b), (f), (g), (h) or (i) of the Lease shall have occurred and be continuing, (b) if such notice (orcontest shall be conducted in a manner requiring the payment of the Tax, if sooner, on Lessee shall advance to or before for the last date upon which the contest benefit of such Tax can be initiated, provided that Indemnitee (on an interest-free basis) the Tax Indemnitee's notice amount of such payment and shall agree to the Charterer discloses such date), indemnify such Tax Indemnitee shallagainst any adverse tax consequences to such Tax Indemnitee resulting from such interest-free loan and (c) the action to be taken will not result in any material danger of forfeiture, upon receipt of an indemnity satisfactory to it for all reasonable costs, expenses, losses, legal and accountants' fees and disbursements, and for all penalties, fines, additions to tax and interest, and at the expense sale or loss of the ChartererAircraft, contest the Airframe or any Engine (unless Lessee shall have provided to Owner Trustee a bond or other sufficient protection against such risk reasonably acceptable to Owner Trustee) or any material risk of the imposition of criminal penalties. In any contest under this Section 7.2.4 conducted by Lessee, Lessee shall determine the forum and manner in which such contest shall be conducted and, upon the written request of the relevant Tax Claim Indemnitee, shall advise such Tax Indemnitee of the status of such contest, and each Tax Indemnitee shall take reasonable steps to cooperate with Lessee, at Lessee’s request and expense, in connection with such contest. Lessee shall not be permitted to conduct such a contest in its name or in the name of the relevant Tax Indemnitee (and instead a Tax Indemnitee, at Lessee’s request, shall contest in its own name as provided in the next paragraph) if (x) an Event of Default under Section 14(a), (b), (f), (g), (h) or (i) of the Lease shall have occurred and be continuing or (y) such contest involves issues for which Lessee is not obligated under this Section 7.2 that can not be severed by reasonable efforts of the Tax Indemnitee from all issues for which Lessee might be so obligated. If requested by Lessee in writing, and if Lessee is not itself contesting a claim under this Section 7.2.4, the relevant Tax Indemnitee shall contest, diligently and in good faith, in the name of such Tax Indemnitee the validity, applicability and amount of the relevant Tax by (1I) resisting payment thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriate, (2II) not paying the same except under protest, if protest is be necessary and or proper, or (3III) if payment shall be made, using reasonable efforts to promptly obtain a refund thereof in appropriate administrative and judicial proceedings, or both; provided, however, provided that in no event will such Tax -------- ------- Indemnitee be required (1) Lessee shall have agreed to contest or continue to contest any Tax Claim unless pay such Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim, including, without limitation, all reasonable legal, accountants’ and investigatory fees and disbursements, (2) if such contest shall be conducted in a manner requiring the Owner Participant payment of the Tax, Lessee shall have reasonably determined that advance to such Tax Indemnitee (on an interest-free basis) the amount of such payment and shall agree to indemnify such Tax Indemnitee against any adverse tax consequences to such Tax Indemnitee resulting from such interest-free loan, (3) the action to be taken will not result in any material risk danger of saleforfeiture, forfeiture sale or loss ofof the Aircraft, the Airframe or the creation of any lien Engine or Part (except if the Charterer unless Lessee shall have adequately bonded provided to Owner Trustee a bond or other sufficient protection against such lienrisk reasonably acceptable to Owner Trustee) and (4) if an Event of Default shall have occurred and be continuing, or otherwise made provision to protect the interests of such Tax Indemnitee and the Owner Participant in a manner Lessee shall have provided security for its related tax indemnity obligation reasonably satisfactory acceptable to such Tax Indemnitee and the Owner Participant) on, the Vessel Interest, any part thereof or interest therein. If such contest shall involve payment of the Tax Claim, the Charterer shall have advanced to such Tax Indemnitee the amount of such payment plus interest, penalties and additions to tax with respect thereto on an interest-free basis, and shall have agreed to indemnify the Tax Indemnitee, on an After-Tax Basis, for any adverse tax consequences resulting from such advance. If permitted by applicable law, the Charterer may contest, at its own expense, the imposition of any Tax Claim if the proviso in the second preceding sentence is satisfied. In any contest controlled under this Section 7.2.4 conducted by the a Tax Indemnitee, such Tax Indemnitee will consult with shall determine the Charterer forum for such contest and permit the Charterer to participate in a reasonable manner in the conduct of the contest. A which it shall be conducted; provided that such Tax Indemnitee shall not makeconsult in good faith with Lessee and its counsel, accept and provide to Lessee and its counsel any communications to or enter into a settlement from the relevant taxing authority or other compromise administrative or judicial body, with respect to any Taxes indemnified pursuant to the issues for which Lessee may be obligated under this Section 13.2 7.2. If a refund (which proceeding the whether in cash or in any other form) shall be obtained by or for any Tax Indemnitee is required to continue)of all or part of any Tax paid by Lessee or for which Lessee shall have made an advance to, or forego or terminate any such proceeding with respect to Taxes indemnified pursuant to this Section 13.2reimbursed, without the prior written consent of the Charterer. Notwithstanding the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim or effects a settlement or compromise of any such Tax that the Tax Indemnitee is required to contest or otherwise terminates any such contest without such prior written consent of the ChartererIndemnitee, such Tax Indemnitee shall promptly pay Lessee an amount equal to the amount of such refund (which shall reduce the amount of any interest-free loan previously made by Lessee under this Section 7.2.4), together with any interest received on such refund attributable to such Tax that is properly attributable to the period subsequent to such payment or reimbursement by Lessee, reduced by any Taxes payable by such Tax Indemnitee as a result of the receipt or accrual of such refund and interest, and increased by any Tax benefit realized by such Tax Indemnitee as a result of any payment by such Tax Indemnitee pursuant to this sentence; provided that the subsequent loss of a refund for which payment has been made to Lessee under this paragraph shall be deemed treated as an indemnifiable Tax hereunder without regard to have waived its the exclusions set forth in Section 7.2.2. If, without the consent of Lessee, a Tax Indemnitee elects not to, or fails to, contest or cooperate in the contest of any Tax as required in accordance with this Section 7.2.4, or elects to settle, compromise or otherwise terminate any such contest, such election or failure shall constitute a waiver by each Tax Indemnitee of any right to any indemnity payment by the Charterer amount that would might otherwise be payable by the Charterer Lessee pursuant to this Section 13.2 in 7.2 with respect to such Tax (and any other Tax for which a successful contest is materially adversely affected because of such election or failure), other than any expenses of the contest, and, if Lessee has theretofore provided such Tax ClaimIndemnitee with an interest-free loan to pay such amount, such Tax Indemnitee shall promptly repay an amount which, after subtraction of any further net savings of Taxes actually realized by such Tax Indemnitee as a result of such repayment, shall be equal to the amount of such interest-free loan, together with interest on the amount of such loan from the date such loan was made to the date of repayment pursuant to this sentence at the rate that would have been paid by the relevant taxing authority had such contest resulted in a refund.

Contests; Refunds. (i) In the event If a taxing jurisdiction makes ----------------- a written claim with respect to is made against any Tax Indemnitee for any Tax for which a Charterer Lessee may be liable under obligated pursuant to this Section 13.2 (a "Tax Claim"), the Charterer may cause the applicable Tax --- ----- Indemnitee to contest such Tax Claim as set forth herein. In the event any Tax Indemnitee receives notice of a Tax Claim or potential Tax Claim which may be indemnified under this Section 13.27.2, such Tax Indemnitee shall promptly notify the Charterer thereofLessee in writing of such claim. If requested by Lessee in writing, Lessee shall, subject to the Charterer conditions set forth in writing within 30 days the next paragraph, be entitled at its sole expense to contest such Tax in the name of receipt the relevant Tax Indemnitee or of Lessee through appropriate administrative and judicial proceedings (including pursuing all judicial appeals); provided that (a) no Event of Default under Section 14(a), (b), (f), (g), (h) or (i) of the Lease shall have occurred and be continuing, (b) if such notice (orcontest shall be conducted in a manner requiring the payment of the Tax, if sooner, on Lessee shall advance to or before for the last date upon which the contest benefit of such Tax can be initiated, provided that Indemnitee (on an interest-free basis) the Tax Indemnitee's notice amount of such payment and shall agree to the Charterer discloses such date), indemnify such Tax Indemnitee shallagainst any adverse tax consequences to such Tax Indemnitee resulting from such interest-free loan and (c) the action to be taken will not result in any material danger of forfeiture, upon receipt of an indemnity satisfactory to it for all reasonable costs, expenses, losses, legal and accountants' fees and disbursements, and for all penalties, fines, additions to tax and interest, and at the expense sale or loss of the ChartererAircraft, contest the Airframe or any Engine (unless Lessee shall have provided to Owner Trustee a bond or other sufficient protection against such risk reasonably acceptable to Owner Trustee) or any material risk of the imposition of criminal penalties. In any contest under this Section 7.2.4 conducted by Lessee, Lessee shall determine the forum and manner in which such contest shall be conducted and, upon the written request of the relevant Tax Claim Indemnitee, shall advise such Tax Indemnitee of the status of such contest, and each Tax Indemnitee shall take reasonable steps to cooperate with Lessee, at Lessee’s request and expense, in connection with such contest. CT1001520_LA1_AAL_A320Family_EXECUTION LA1 – Participation Agreement [Participation Agreement ([Year] MSN [MSN])] Lessee shall not be permitted to conduct such a contest in its name or in the name of the relevant Tax Indemnitee (and instead a Tax Indemnitee, at Lessee’s request, shall contest in its own name as provided in the next paragraph) if (x) an Event of Default under Section 14(a), (b), (f), (g), (h) or (i) of the Lease shall have occurred and be continuing or (y) such contest involves issues for which Lessee is not obligated under this Section 7.2 that can not be severed by reasonable efforts of the Tax Indemnitee from all issues for which Lessee might be so obligated. If requested by Lessee in writing, and if Lessee is not itself contesting a claim under this Section 7.2.4, the relevant Tax Indemnitee shall contest, diligently and in good faith, in the name of such Tax Indemnitee the validity, applicability and amount of the relevant Tax by (1I) resisting payment thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriate, (2II) not paying the same except under protest, if protest is be necessary and or proper, or (3III) if payment shall be made, using reasonable efforts to promptly obtain a refund thereof in appropriate administrative and judicial proceedings, or both; provided, however, provided that in no event will such Tax -------- ------- Indemnitee be required (1) Lessee shall have agreed to contest or continue to contest any Tax Claim unless pay such Tax Indemnitee on demand all reasonable out-of-pocket costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim, including, without limitation, all reasonable legal, accountants’ and investigatory fees and disbursements, (2) if such contest shall be conducted in a manner requiring the Owner Participant payment of the Tax, Lessee shall have reasonably determined that advance to such Tax Indemnitee (on an interest-free basis) the amount of such payment and shall agree to indemnify such Tax Indemnitee against any adverse tax consequences to such Tax Indemnitee resulting from such interest-free loan, (3) the action to be taken will not result in any material risk danger of saleforfeiture, forfeiture sale or loss ofof the Aircraft, the Airframe or the creation of any lien Engine or Part (except if the Charterer unless Lessee shall have adequately bonded provided to Owner Trustee a bond or other sufficient protection against such lienrisk reasonably acceptable to Owner Trustee) and (4) if an Event of Default shall have occurred and be continuing, or otherwise made provision to protect the interests of such Tax Indemnitee and the Owner Participant in a manner Lessee shall have provided security for its related tax indemnity obligation reasonably satisfactory acceptable to such Tax Indemnitee and the Owner Participant) on, the Vessel Interest, any part thereof or interest therein. If such contest shall involve payment of the Tax Claim, the Charterer shall have advanced to such Tax Indemnitee the amount of such payment plus interest, penalties and additions to tax with respect thereto on an interest-free basis, and shall have agreed to indemnify the Tax Indemnitee, on an After-Tax Basis, for any adverse tax consequences resulting from such advance. If permitted by applicable law, the Charterer may contest, at its own expense, the imposition of any Tax Claim if the proviso in the second preceding sentence is satisfied. In any contest controlled under this Section 7.2.4 conducted by the a Tax Indemnitee, such Tax Indemnitee will consult with shall determine the Charterer forum for such contest and permit the Charterer to participate in a reasonable manner in the conduct of the contest. A which it shall be conducted; provided that such Tax Indemnitee shall not makeconsult in good faith with Lessee and its counsel, accept and provide to Lessee and its counsel any communications to or enter into a settlement from the relevant taxing authority or other compromise administrative or judicial body, with respect to any Taxes indemnified pursuant to the issues for which Lessee may be obligated under this Section 13.2 7.2. If a refund (which proceeding the whether in cash or in any other form) shall be obtained by or for any Tax Indemnitee is required to continue)of all or part of any Tax paid by Lessee or for which Lessee shall have made an advance to, or forego or terminate any such proceeding with respect to Taxes indemnified pursuant to this Section 13.2reimbursed, without the prior written consent of the Charterer. Notwithstanding the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim or effects a settlement or compromise of any such Tax that the Tax Indemnitee is required to contest or otherwise terminates any such contest without such prior written consent of the ChartererIndemnitee, such Tax Indemnitee shall promptly pay Lessee an amount equal to the amount of such refund (which shall reduce the amount of any interest-free loan previously made by Lessee under this Section 7.2.4), together with any interest received on such refund attributable to such Tax that is properly attributable to the period subsequent to such payment or reimbursement by Lessee, reduced by any Taxes payable by such Tax Indemnitee as a result of the receipt or accrual of such refund and interest, and increased by any Tax benefit realized by such Tax Indemnitee as a result of any payment by such Tax Indemnitee pursuant to this sentence; provided that the subsequent loss of a refund for which payment has been made to Lessee under this paragraph shall be deemed treated as an indemnifiable Tax hereunder without regard to have waived its the exclusions set forth in Section 7.2.2. If, without the consent of Lessee, a Tax Indemnitee elects not to, or fails to, contest or cooperate in the contest of any Tax as required in accordance with this Section 7.2.4, or elects to settle, compromise or otherwise terminate any such contest, such election or failure shall CT1001520_LA1_AAL_A320Family_EXECUTION LA1 – Participation Agreement [Participation Agreement ([Year] MSN [MSN])] constitute a waiver by each Tax Indemnitee of any right to any indemnity payment by the Charterer amount that would might otherwise be payable by the Charterer Lessee pursuant to this Section 13.2 in 7.2 with respect to such Tax (and any other Tax for which a successful contest is materially adversely affected because of such election or failure), other than any expenses of the contest, and, if Lessee has theretofore provided such Tax ClaimIndemnitee with an interest-free loan to pay such amount, such Tax Indemnitee shall promptly repay an amount which, after subtraction of any further net savings of Taxes actually realized by such Tax Indemnitee as a result of such repayment, shall be equal to the amount of such interest-free loan, together with interest on the amount of such loan from the date such loan was made to the date of repayment pursuant to this sentence at the rate that would have been paid by the relevant taxing authority had such contest resulted in a refund.

Contests; Refunds. (i) In the event a taxing jurisdiction makes ----------------- a claim with respect to any Tax for which a Charterer may be liable under this Section 13.2 (a "Tax Claim"), the Charterer may cause the applicable Tax --- ----- Indemnitee to contest such Tax Claim as set forth herein. In the event any Tax Indemnitee receives notice of a Tax Claim or potential Tax Claim which may be indemnified under this Section 13.2, such Tax Indemnitee shall promptly notify the Charterer thereof. If requested by the Charterer in writing within 30 days of receipt of such notice (or, if sooner, on or before the last date upon which the contest of such Tax can be initiated, provided that the Tax Indemnitee's notice to the Charterer discloses such date), such Tax Indemnitee shall, upon receipt of an indemnity satisfactory to it for all reasonable costs, expenses, losses, legal and accountants' fees and disbursements, and for all penalties, fines, additions to tax and interest, and at the expense of the Charterer, contest the imposition of any Tax Claim by (1) resisting payment thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriate, (2) not paying the same except under protest, if protest is necessary and proper, or (3) if payment shall be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, or both; provided, however, -------- ------- that in no event will such Tax -------- ------- Indemnitee be required to contest or continue to contest any Tax Claim unless such Tax Indemnitee and the Owner Participant shall have reasonably determined that the action to be taken will not result in any material risk of sale, forfeiture or loss of, or the creation of any lien (except if the Charterer shall have adequately bonded such lien, or otherwise made provision to protect the interests of such Tax Indemnitee and the Owner Participant in a manner reasonably satisfactory to such Tax Indemnitee and the Owner Participant) on, the Vessel Interest, any part thereof or interest therein. If such contest shall involve payment of the Tax Claim, the Charterer shall have advanced to such Tax Indemnitee the amount of such payment plus interest, penalties and additions to tax with respect thereto on an interest-interest- free basis, and shall have agreed to indemnify the Tax Indemnitee, on an After-After- Tax Basis, for any adverse tax consequences resulting from such advance. If permitted by applicable law, the Charterer may contest, at its own expense, the imposition of any Tax Claim if the proviso in the second preceding sentence is satisfied. In any contest controlled by the Tax Indemnitee, such Tax Indemnitee will consult with the Charterer and permit the Charterer to participate in a reasonable manner in the conduct of the contest. A Tax Indemnitee shall not make, accept or enter into a settlement or other compromise with respect to any Taxes indemnified pursuant to this Section 13.2 (which proceeding the Tax Indemnitee is required to continue), or forego or terminate any such proceeding with respect to Taxes indemnified pursuant to this Section 13.2, without the prior written consent of the Charterer. Notwithstanding the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim or effects a settlement or compromise of any such Tax that the Tax Indemnitee is required to contest or otherwise terminates any such contest without such prior written consent of the Charterer, such Tax Indemnitee shall be deemed to have waived its right to any indemnity payment by the Charterer that would otherwise be payable by the Charterer pursuant to this Section 13.2 in respect of such Tax Claim.

Contests; Refunds. (i) In the event a taxing jurisdiction makes ----------------- a claim with respect to any Tax for which a Charterer may be the Lessee is liable under this Section 13.2 12.2 (a "“Tax Claim"”), the Charterer Lessee may cause the applicable Tax --- ----- Indemnitee to contest such Tax Claim as set forth herein. In the event any Tax Indemnitee receives notice of a Tax Claim or potential Tax Claim which may be indemnified is indemnifiable under this Section 13.212.2, such Tax Indemnitee (i) shall promptly notify the Charterer Lessee thereof, but the failure to give such notice shall not diminish the Lessee’s obligation hereunder, except to the extent that the Lessee’s right to contest such Tax Claim or potential Tax Claim is foreclosed thereby and (ii) shall not take any action with respect to such Tax Claim or potential Tax Claim without the consent of the Lessee for 30 days after notifying the Lessee unless the failure to take action could result in the imposition of penalties or fines or material danger of sale, forfeiture or loss of, or the creation of any Lien on, the Platform or the Undivided Interest or any portion thereof or interest therein. If requested by the Charterer Lessee in writing within 30 days of receipt of such notice (or, if sooner, on or before the last date upon which the contest of such Tax can practicably be initiatedinitiated in good faith, provided that the Tax Indemnitee's ’s notice to the Charterer Lessee discloses such date), such Tax Indemnitee shall, upon receipt of provided that (I) it has received an indemnity satisfactory to it for whereby the Lessee shall have agreed to pay and shall pay to such Tax Indemnitee on an After-Tax Basis all reasonable costs, expenses, losses, legal and accountants' ’ fees and disbursements, and for all penalties, fines, additions to tax and interestinterest in connection with contesting such Tax Claim and (II) no Lease Event of Default or Lease Default described in Section 15 (a), (b), (c), (f) or (g) of the Lease shall have occurred and be continuing, and at the expense of the ChartererLessee, contest or permit the Lessee to contest the imposition of any Tax Claim by (1) resisting payment thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriatedetermines that there is a reasonable basis for doing so, (2) not paying the same except under protest, if protest is necessary and proper, or (3) if payment shall be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, or both; provided, however, that in no event will such Tax -------- ------- Indemnitee be required to contest or continue to contest any Tax Claim unless such Tax Indemnitee and the Owner Participant shall have reasonably determined that the action to be taken will not result in any material risk of sale, forfeiture or loss of, or the creation of any lien (except if the Charterer shall have adequately bonded such lien, or otherwise made provision to protect the interests of such Tax Indemnitee and the Owner Participant in a manner reasonably satisfactory to such Tax Indemnitee and the Owner Participant) on, the Vessel Interest, any part thereof or interest therein. If such contest shall involve payment of the Tax Claim, the Charterer shall have advanced to such Tax Indemnitee the amount of such payment plus interest, penalties and additions to tax with respect thereto on an interest-free basis, and shall have agreed to indemnify the Tax Indemnitee, on an After-Tax Basis, for any adverse tax consequences resulting from such advance. If permitted by applicable law, the Charterer may contest, at its own expense, the imposition of any Tax Claim if the proviso in the second preceding sentence is satisfied. In any contest controlled by the Tax Indemnitee, such Tax Indemnitee will consult with the Charterer and permit the Charterer to participate in a reasonable manner in the conduct of the contest. A Tax Indemnitee shall not make, accept or enter into a settlement or other compromise with respect to any Taxes indemnified pursuant to this Section 13.2 (which proceeding the Tax Indemnitee is required to continue), or forego or terminate any such proceeding with respect to Taxes indemnified pursuant to this Section 13.2, without the prior written consent of the Charterer. Notwithstanding the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim or effects a settlement or compromise of any such Tax that the Tax Indemnitee is required to contest or otherwise terminates any such contest without such prior written consent of the Charterer, such Tax Indemnitee shall be deemed to have waived its right to any indemnity payment by the Charterer that would otherwise be payable by the Charterer pursuant to this Section 13.2 in respect of such Tax Claim.to

Contests; Refunds. (i) In the event If a taxing jurisdiction makes ----------------- a written claim with respect to is made against any Tax Indemnitee for any Tax for which a Charterer the Lessee may be liable under obligated pursuant to this Section 13.2 (a "Tax Claim"10(c), the Charterer may cause the applicable Tax --- ----- Indemnitee to contest such Tax Claim as set forth herein. In the event or if any Tax Indemnitee receives notice of a shall determine that any Tax Claim or potential Tax Claim for which the Lessee may be indemnified under obligated pursuant to this Section 13.210(c) may be payable, such Tax Indemnitee shall promptly notify the Charterer thereofLessee promptly in writing. If timely requested by the Charterer Lessee in writing within 30 days of receipt writing, such Tax Indemnitee shall in good faith diligently contest through appropriate administrative and judicial proceedings (including pursuing all judicial appeals, but not to the United States Supreme Court) in the name of such notice Tax Indemnitee (or, if soonerrequested by the Lessee and permitted by applicable law, on and subject to the conditions set forth in the next sentence, permit the Lessee to contest in the name of the Lessee or before such Tax Indemnitee), the last date upon which the contest validity, applicability and amount of such Tax can be initiated, provided that the Tax Indemnitee's notice to the Charterer discloses such date), such Tax Indemnitee shall, upon receipt of an indemnity satisfactory to it for all reasonable costs, expenses, losses, legal and accountants' fees and disbursements, and for all penalties, fines, additions to tax and interest, and at the expense of the Charterer, contest the imposition of any Tax Claim by (1x) resisting payment thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriate, (2y) not paying the same except under protest, if protest is be necessary and or proper, or (3z) if payment shall be made, using reasonable efforts to obtain seeking a refund thereof in appropriate administrative and judicial proceedings, ; provided that (A) prior to taking such administrative or both; provided, however, that in no event will such Tax -------- ------- Indemnitee be required judicial action the Lessee shall have agreed to contest or continue to contest any Tax Claim unless pay (and shall pay) such Tax Indemnitee on 30 AA-Boeing EETC-Leased Aircraft Participation Agreement demand all reasonable out-of-pocket costs and expenses which such Tax Indemnitee may incur in connection with contesting such claim, including, without limitation, all reasonable legal, accountants' and investigatory fees and disbursements, (B) if such contest shall be conducted in a manner requiring the Owner Participant payment of the Tax, the Lessee shall have reasonably determined that advance to such Tax Indemnitee (on an interest-free basis) the amount of such payment and shall agree to indemnify such Tax Indemnitee against any adverse tax consequences to such Tax Indemnitee resulting from such interest-free loan, (C) the action to be taken will not result in any material risk danger of saleforfeiture, forfeiture sale or loss ofof the Aircraft, the Airframe or any Engine (unless the creation of any lien (except if the Charterer Lessee shall have adequately bonded provided to the Lessor a bond or other sufficient protection against such lien, or otherwise made provision risk acceptable to protect the interests of Lessor and such Tax Indemnitee Indemnitee), (D) if an Event of Default or Specified Default shall have occurred and be continuing, the Owner Participant in a manner Lessee shall have provided security for its related tax indemnity obligation reasonably satisfactory acceptable to such Tax Indemnitee, (E) prior to commencing any contest involving income Taxes or any judicial action (but not administrative action) involving non-income Taxes, if reasonably requested by the Tax Indemnitee, the Lessee shall have provided to such Tax Indemnitee an opinion of tax counsel (who may be an employee of American in the case of a judicial action involving non-income Taxes) selected by the Lessee and the Owner Participant) on, the Vessel Interest, any part thereof or interest therein. If such contest shall involve payment of the Tax Claim, the Charterer shall have advanced reasonably acceptable to such Tax Indemnitee to the effect that there is a reasonable basis (consistent with ABA Opinion 85-352) for contesting such claim, and (F) the amount of the potential indemnity (together with the amount of all similar or logically related claims that have been or could be raised in any audit involving such payment plus interest, penalties and additions Tax Indemnitee for which the Lessee may be liable to tax pay an indemnity under this Section 10(c)) exceeds $10,000 in connection with respect thereto on an interest-free basis, and the Lease. The Lessee shall have agreed be permitted to indemnify conduct such a contest (i) in its name if contesting in its name is allowable under applicable law or (ii) in the name of the relevant Tax Indemnitee, on an After-if consented to by the relevant Tax Basis, for any adverse tax consequences resulting from such advanceIndemnitee (it being understood that the relevant Tax Indemnitee shall consider in good faith the Lessee's request to conduct a contest in the name of the relevant Tax Indemnitee). If permitted by applicable lawOtherwise, the Charterer may relevant Tax Indemnitee shall conduct such contest, at its own expense, the imposition of any Tax Claim if the proviso in the second preceding sentence is satisfied. In any contest controlled under this Section 10(c)(5) conducted by the Lessee, the Lessee shall determine the forum and manner in which such contest shall be conducted and, upon the written request of the relevant Tax Indemnitee, will advise such Tax Indemnitee of that status of such contest. In any contest under this Section 10(c)(5) conducted by a Tax Indemnitee, such Tax Indemnitee will consult with shall determine the Charterer forum for such contest and permit the Charterer to participate in a reasonable manner in the conduct of the contest. A which it shall be conducted; provided that such Tax Indemnitee shall not makeconsult in good faith with the Lessee and its counsel, accept and provide to the Lessee and its counsel any communications to or enter into a settlement from the relevant taxing authority or other compromise administrative or judicial body, with respect to any Taxes indemnified pursuant to the issues for which the Lessee may be obligated under this Section 13.2 (which proceeding the 10(c). If any Tax Indemnitee is required to continue), shall obtain a refund of all or forego or terminate any such proceeding with respect to Taxes indemnified pursuant to this Section 13.2, without the prior written consent part of the Charterer. Notwithstanding the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim paid by the Lessee or effects a settlement or compromise of any for which the Lessee shall have reimbursed such Tax that the Tax Indemnitee is required to contest or otherwise terminates any such contest without such prior written consent of the ChartererIndemnitee, such Tax Indemnitee shall pay the Lessee an amount equal to the amount of such refund, including any interest received on such refund attributable to such Tax that is properly attributable 31 AA-Boeing EETC-Leased Aircraft Participation Agreement to the period subsequent to such payment or reimbursement by the Lessee, reduced by any Taxes payable by such Tax Indemnitee as a result of the receipt or accrual of such refund and interest, and increased by any reduction in Taxes actually realized by such Tax Indemnitee as a result of any payment by such Tax Indemnitee pursuant to this sentence, which reduction was not previously taken into account in computing an amount payable by the Lessee hereunder. If it is later determined that the Tax Indemnitee was not entitled to such refund, the portion of such refund that is repaid, recaptured or disallowed will be deemed treated as Taxes for which the Lessee must indemnify the Tax Indemnitee pursuant to have waived its this Section 10(c) but without regard to Section 10(c)(2) hereof. If a Tax Indemnitee elects not to contest any Tax that it is otherwise required to contest in accordance with this Section 10(c)(5), or elects to settle, compromise or otherwise terminate any such contest without the consent of the Lessee, such election shall constitute a waiver by such Tax Indemnitee of any right to any indemnity payment by the Charterer amount that would might otherwise be payable by the Charterer Lessee pursuant to this Section 13.2 10(c) with respect to such Tax (other than any expenses of the contest) and, if the Lessee has theretofore provided such Tax Indemnitee with an interest-free loan to pay such amount, such Tax Indemnitee shall promptly repay an amount which, after subtraction of any further reduction in respect Taxes actually realized by such Tax Indemnitee as a result of such Tax Claimpayment, which reduction was not previously taken into account in computing an amount payable by the Lessee hereunder, shall be equal to the amount of such interest-free loan, together with interest on the amount of such loan from the date such loan was made to the date of repayment pursuant to this sentence at the rate that would have been paid by the relevant taxing authority had such contest resulted in a refund.

Contests; Refunds. (i) In If a written claim is made against any Indemnitee for any Taxes that the event a taxing jurisdiction makes ----------------- a claim with respect Lessee could be required to any Tax for which a Charterer may be liable under indemnify against pursuant to this Section 13.2 (a "Tax Claim"), the Charterer may cause the applicable Tax --- ----- Indemnitee to contest such Tax Claim as set forth herein. In the event any Tax Indemnitee receives notice of a Tax Claim or potential Tax Claim which may be indemnified under this Section 13.2Clause 10, such Tax Indemnitee shall promptly notify the Charterer thereofLessee in writing (and shall take no action with respect to such claim to the extent reasonably practicable for a period of 30 days following such notice to the Lessee), but the failure to give such notice shall not diminish the Lessee's obligation hereunder, except to the extent that the Lessee's ability to contest such Tax is materially adversely affected or if and to the extent such failure results in the imposition of or an increase in the amount of any penalties, interest or additions to such Tax. If requested by the Charterer Lessee in writing writing, within 30 days of receipt of such notice from the Indemnitee, such Indemnitee shall in good faith contest (or, if sooner, on or before the last date upon which the contest of such Tax can be initiated, provided that the Tax Indemnitee's notice including pursuing all judicial appeals other than appeals to the Charterer discloses such dateUnited States Supreme Court), such Tax Indemnitee shall, upon receipt of an indemnity satisfactory to it for all reasonable costs, expenses, losses, legal and accountants' fees and disbursements, and for all penalties, fines, additions to tax and interest, and at the expense of the ChartererLessee, in the name of such Indemnitee (or the Indemnitee, in its sole discretion, may permit the Lessee, if permitted by law, to contest in the imposition name of any Tax Claim the Lessee or such Indemnitee) the validity, applicability and amount of such Taxes by (1in the sole discretion of the Person conducting such contest) (i) resisting payment thereof, if such Tax Indemnitee in its reasonable discretion shall determine such course of action to be appropriate, (2ii) not paying the same except under protest, if protest is necessary and proper, or (3iii) if payment shall be made, using reasonable efforts to obtain seeking a refund thereof in appropriate administrative and judicial proceedings; PROVIDED that (u) prior to taking such action, or both; providedthe Lessee shall have agreed to pay such Indemnitee all reasonable out-of-pocket costs and expenses that such Indemnitee incurs in connection with and reasonably allocable to contesting such claim, howeverincluding, that in no event will without limitation, all reasonable out-of-pocket legal, accountants' and investigatory fees and disbursements, (v) if such Tax -------- ------- Indemnitee contest is to be required to contest or continue to contest any Tax Claim unless such Tax Indemnitee initiated by the payment of, and the Owner Participant claiming of a refund for, such Taxes, then notwithstanding Clauses 10.4 or 10.5, the Lessee shall have reasonably determined that provide such Indemnitee with sufficient funds (on an interest-free basis and at no additional net after-tax cost to such Indemnitee) to make such payment, (w) such proceedings do not involve (A) the action to be taken will not result in any material risk likelihood of the sale, forfeiture or loss ofof the Aircraft, Airframe any Engine or any Part, unless the creation of any lien (except if the Charterer Lessee shall have adequately bonded provided security for the Lessee's obligations under this Clause 10 with respect to such lien, or otherwise made provision to protect the interests of such Tax Indemnitee and the Owner Participant in a manner claim reasonably satisfactory to such Tax Indemnitee and the Owner ParticipantBeneficiary, or (B) onany material risk of the imposition of criminal penalties arising from the proper conduct of such proceeding, (x) the Lessee shall have provided to the Indemnitee an opinion of the Lessee's independent tax counsel (such counsel to be reasonably acceptable to the Indemnitee) to the effect that a reasonable basis, within the meaning of ABA Formal Opinion No. 85-352, exists for such contest, and (y) no Termination Event shall have occurred and be continuing, unless the Lessee shall have provided security for the Lessee's obligations under this Clause 10 with respect to such claim satisfactory to such Indemnitee. In any contest conducted by a Indemnitee, the Vessel InterestIndemnitee shall consult in good faith with the Lessee concerning the method and the forum for such contest and shall permit the Lessee to review and comment upon all written claims and submissions, but the Indemnitee shall have ultimate control over all aspects of such contest. The Lessee shall keep the Indemnitee fully informed as to the nature, conduct and results of any contest conducted by the Lessee in the name of such Indemnitee. Any Indemnitee may elect not to contest pursuant to this Clause 10.6, or to settle any contest, but such election to settle or not to contest without the written consent of Lessee (which consent shall not be unreasonably withheld) shall constitute a waiver by such Indemnitee of any right to indemnification pursuant to this Clause 10 with respect to the claim which was the subject of such proposed contest or settlement, as the case may be (and any other claim or Tax with respect to which a successful contest is foreclosed as the result of such settlement or election not to contest) and, if the Lessee has theretofore provided such Indemnitee with the funds to pay the Taxes that are the subject of such proposed contest or settlement, as the case may be, such Indemnitee shall promptly repay such funds. Notwithstanding anything contained in this Clause 10 to the contrary, the Indemnitee shall not be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely by a court of competent jurisdiction pursuant to the contest provisions of this Clause 10.6, 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 the Indemnitee shall have received, at the Lessee's expense, an opinion of independent tax counsel selected by the Lessee and reasonably acceptable to such Indemnitee to the effect that as a result of such change in law (or interpretation thereof) or a change in facts, it is more likely than not that the Indemnitee will prevail in such contest. If any Indemnitee shall obtain a refund or credit of all or any part thereof or interest therein. If such contest shall involve payment of any Taxes that the Tax ClaimLessee, the Charterer pursuant to this Clause 10.6, shall have paid for or advanced to such Tax Indemnitee or for which the Lessee shall have reimbursed such Indemnitee, such Indemnitee shall, at such time as no Termination Event shall have occurred and be continuing, promptly pay to the Lessee an amount which, after the subtraction of the amount of any further net tax savings actually realized by such Indemnitee as a result of the payment under this paragraph, and the addition of any net tax detriment realized by such Indemnitee as a result of the receipt or accrual of such refund and any interest received or accrued by such Indemnitee on such refund, is equal to the amount of such refund or credit, plus any interest actually received or credited by such Indemnitee on such refund or credit that is fairly attributable to any Taxes paid by the Lessee to or for such Indemnitee; PROVIDED that such Indemnitee shall not be obligated to make any payment to the Lessee pursuant to this sentence (other than on account of interest actually received or credited) to the extent that the amount of such payment plus interest, penalties and additions to tax with respect thereto on an interest-free basis, and shall have agreed to indemnify would exceed (x) the Tax Indemnitee, on an After-Tax Basis, for any adverse tax consequences resulting from such advance. If permitted by applicable law, the Charterer may contest, at its own expense, the imposition amount of any Tax Claim if the proviso in the second preceding sentence is satisfied. In any contest controlled all prior payments made by the Tax Indemnitee, Lessee to such Tax Indemnitee will consult with the Charterer and permit the Charterer to participate in a reasonable manner in the conduct of the contest. A Tax Indemnitee shall not make, accept or enter into a settlement or other compromise with respect to any Taxes indemnified pursuant to this Section 13.2 Clause 10 less (which proceeding y) the Tax amount of all prior payments by such Indemnitee is required to continue), or forego or terminate any such proceeding with respect to Taxes indemnified pursuant to this Section 13.2, without the prior written consent of the Charterer. Notwithstanding the foregoing, if a Tax Indemnitee refuses to contest any Tax Claim or effects a settlement or compromise of any such Tax Lessee (other than that the Tax Indemnitee is required to contest or otherwise terminates any such contest without such prior written consent of the Charterer, such Tax Indemnitee shall be deemed to have waived its right to any indemnity payment by the Charterer that would otherwise be payable by the Charterer pursuant to this Section 13.2 in respect of such Tax Claim.portion