Common use of Covered Income Tax Clause in Contracts

Covered Income Tax. For purposes of subsection (b)(i) and (b)(ii) of this Section 10, a Covered Income Tax means (i) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes or property taxes) imposed on an Indemnitee by any state or local Taxing Authority in whose jurisdiction such Indemnitee did not otherwise have sufficient business activities or business presence to be subject to tax solely as a result of (x) the operation of the Aircraft in such jurisdiction or (y) the transactions contemplated by the Operative Documents, to the extent such taxes are directly attributable to such operation of the Aircraft or to such transactions. For purposes of determining whether or not the Indemnitee engaged in business, maintained an office or other place of (ii) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes, or property taxes) imposed on such Indemnitee by any foreign jurisdiction (i) which are imposed as a result of Lessee's or sublessee's activities in such foreign jurisdiction in connection with the transactions contemplated by the Operative Documents or (ii) which are withholding taxes on Basic Rent to the extent such withholding taxes would otherwise result in Basic Rent payments being insufficient to cover principal and interest payments on the Equipment Notes; (iii) in the case of the Indenture Trustee or the Trust Indenture Estate any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference) imposed on such Indemnitee by a Taxing Authority in or of any foreign jurisdiction or a territory or possession of the United States, other than any such Tax which would not have been imposed in the absence of such Indemnitee's (including for purposes of this definition, all entities with which such Indemnitee is combined, integrated, or consolidated in such Taxing Authority's jurisdiction) engaging in business, maintaining an office or other place of business or otherwise being located in such jurisdiction other than merely by reason of such Indemnitee's participation in the transactions contemplated by the Operative Documents; and (iv) in the case of the Indenture Trustee or the Trust Indenture Estate, a tax imposed by any Taxing Authority other than the Federal government of the United States of America based on, or measured by gross income or receipts (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference), to the extent such Tax is

Covered Income Tax. For purposes of clause (ii) of subsection (b)(i) and (b)(iib) of this Section 10, a Covered Income Tax meansincludes: (i) in the case of any an Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax imposed on, based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes or property taxes) imposed on an Indemnitee (A) -58- 60 by any state or local Taxing Authority other than Taxes imposed by any such state or local jurisdiction in whose jurisdiction such which the Indemnitee did not otherwise have sufficient has its principal place of business activities or business presence to be is subject to tax such Tax as a result of business transactions or other presence unrelated to the transactions contemplated by the Financing Documents or the Operative Documents, unless such Taxes are imposed by such jurisdiction solely as a result of (x) the operation of the Aircraft in such jurisdiction or (y) the transactions contemplated by the Operative Documents, to the extent such taxes are directly attributable to such operation of the Aircraft or to such transactions. For purposes of determining whether or not the Indemnitee engaged in business, maintained an office or other place of and (iiB) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes, or property taxes) imposed on such Indemnitee by any foreign jurisdiction (i) which are imposed as a result of Lessee's or sublessee's activities in such foreign jurisdiction in connection with the transactions contemplated by the Operative Financing Documents or the Operative Documents, provided, however, a Covered Income Tax also includes the incremental amount of franchise taxes, taxes on doing business, capital stock taxes or taxes on, based on or measured by gross or net income of the original Owner Participant attributable to the Lease (excluding, however, any taxes that would be excluded under any provision other than clauses (i) and (ii) of subsection (b) of this Section 10) which are withholding taxes on Basic Rent imposed by the "Home State" of a sublessee (the Home State of a sublessee being the jurisdiction in which such sublessee maintains its principal operations and maintenance center), or in the absence of a Permitted Sublessee, the jurisdiction where the Aircraft is stored, but only to the extent such withholding incremental taxes would otherwise result from activities of Lessee or Permitted Sublessee under the Lease in Basic Rent or with respect to the Home State or the jurisdiction where the Aircraft is stored, and taking into account in calculating such incremental taxes all state tax benefits and savings in the Home State resulting from activities of Lessee or Permitted Sublessee under the Lease, disregarding for such purpose any actual or constructive changes in ownership of the original Owner Participant, provided, however, that Owner Participant and Lessee agree to negotiate, in good faith, a cap to Lessee's liability for indemnity payments being insufficient attributable to cover principal and interest payments on the Equipment Notes;taxes incurred in sublessee's Home State with respect to each Permitted Sublessee; and (iiiii) in the case of the Indenture Trustee or the Trust Indenture Estate Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference) imposed on such Indemnitee by a Taxing Authority in or of any foreign jurisdiction or a territory or possession of the United States, other than any such Tax which would not have been imposed in the absence of such Indemnitee's (including for purposes of this definition, all entities with which such Indemnitee is combined, integrated, or consolidated in such Taxing Authority's jurisdiction) engaging in business, maintaining an office or other place of business or otherwise being located in such jurisdiction other than merely by reason of such Indemnitee's participation in the transactions contemplated by the Operative Documents; and (iv) in the case of the Indenture Trustee or the Trust Indenture Estate, a tax imposed by any Taxing Authority other than the Federal government of the United States of America based on, or measured by gross income or receipts (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference), to the extent such Tax isor

Covered Income Tax. For purposes of clause (ii) of subsection (b)(i) and (b)(iib) of this Section 10, a Covered Income Tax meansincludes: (i) in the case of any an Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax imposed on, based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes or property taxes) imposed on an Indemnitee (A) by any state or local Taxing Authority other than Taxes imposed by any such state or local jurisdiction in whose jurisdiction such which the Indemnitee did not otherwise have sufficient has its principal place of business activities or business presence to be is subject to tax such Tax as a result of business transactions or other presence unrelated to the transactions contemplated by the Financing - 57 - 59 Documents or the Operative Documents, unless such Taxes are imposed by such jurisdiction solely as a result of (x) the operation of the Aircraft in such jurisdiction or (y) the transactions contemplated by the Operative Documents, to the extent such taxes are directly attributable to such operation of the Aircraft or to such transactions. For purposes of determining whether or not the Indemnitee engaged in business, maintained an office or other place of and (iiB) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes, or property taxes) imposed on such Indemnitee by any foreign jurisdiction (i) which are imposed as a result of Lessee's or sublessee's activities in such foreign jurisdiction in connection with the transactions contemplated by the Operative Financing Documents or the Operative Documents, provided, however, a Covered Income Tax also includes the incremental amount of franchise taxes, taxes on doing business, capital stock taxes or taxes on, based on or measured by gross or net income of the original Owner Participant attributable to the Lease (excluding, however, any taxes that would be excluded under any provision other than clauses (i) and (ii) of subsection (b) of this Section 10) which are withholding taxes on Basic Rent imposed by the "Home State" of a sublessee (the Home State of a sublessee being the jurisdiction in which such sublessee maintains its principal operations and maintenance center), or in the absence of a Permitted Sublessee, the jurisdiction where the Aircraft is stored, but only to the extent such withholding incremental taxes would otherwise result from activities of Lessee or Permitted Sublessee under the Lease in Basic Rent or with respect to the Home State or the jurisdiction where the Aircraft is stored, and taking into account in calculating such incremental taxes all state tax benefits and savings in the Home State resulting from activities of Lessee or Permitted Sublessee under the Lease, disregarding for such purpose any actual or constructive changes in ownership of the original Owner Participant, provided, however, that Owner Participant and Lessee agree to negotiate, in good faith, a cap to Lessee's liability for indemnity payments being insufficient attributable to cover principal and interest payments on the Equipment Notes;taxes incurred in sublessee's Home State with respect to each Permitted Sublessee; and (iiiii) in the case of the Indenture Trustee or the Trust Indenture Estate Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference) imposed on such Indemnitee by a Taxing Authority in or of any foreign jurisdiction or a territory or possession of the United States, other than any such Tax which would not have been imposed in the absence of -58- 60 such Indemnitee's (including for purposes of this definition, all entities with which such Indemnitee is combined, integrated, or consolidated in such Taxing Authority's jurisdiction) engaging in business, maintaining an office or other place of business or otherwise being located in such jurisdiction other than merely by reason of such Indemnitee's participation in the transactions contemplated by the Operative Documents; and (iv) in the case of the Indenture Trustee or the Trust Indenture Estate, a tax imposed by any Taxing Authority other than the Federal government of the United States of America based on, or measured by gross income or receipts (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference), to the extent such Tax is.

Covered Income Tax. For purposes of subsection clauses (b)(ii) and (b)(iiii) of subsection (b) of this Section 10, a Covered Income Tax meansincludes: (i) in the case of any an Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax imposed on, based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes or property taxes) imposed on an Indemnitee (A) by any state or local Taxing Authority other than Taxes imposed by any such state or local jurisdiction in whose jurisdiction such which the Indemnitee did not otherwise have sufficient has its principal place of business activities or business presence to be is subject to tax such Tax as a result of business transactions or other presence unrelated to the transactions contemplated by the Financing Documents or the Operative Documents, unless such Taxes are imposed by such jurisdiction solely as a result of (x) the operation of the Aircraft in such jurisdiction or (y) the transactions contemplated by the Operative Documents, to the extent such taxes are directly attributable to such operation of the Aircraft or to such transactions. For purposes of determining whether or not the Indemnitee engaged in business, maintained an office or other place of and (iiB) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes, or property taxes) imposed on such Indemnitee by any foreign jurisdiction (i) which are imposed as a result of Lessee's or sublessee's activities in such foreign jurisdiction in connection with the transactions contemplated by the Operative Financing Documents or the Operative Documents, provided, however, a Covered Income Tax also includes the incremental amount of franchise taxes, taxes on doing business, capital stock taxes or taxes on, based on or measured by gross or net income of the original Owner Participant attributable to the Lease (excluding, however, any taxes that would be excluded under any provision other than clauses (i) and (ii) of subsection (b) of this Section 10) which are withholding taxes on Basic Rent imposed by the "Home State" of a sublessee (the Home State of a sublessee being the jurisdiction in which such sublessee maintains its principal operations and maintenance center), or in the absence of a Permitted Sublessee, the jurisdiction where the Aircraft is stored, but only to the extent such withholding incremental taxes would otherwise result from activities of Lessee or Permitted Sublessee under the Lease in Basic Rent or with respect to the Home State or the jurisdiction where the Aircraft is stored, and taking into account in calculating such incremental taxes all state tax benefits and savings in the Home State resulting from activities of Lessee or Permitted Sublessee under the Lease, disregarding for such purpose any actual or constructive changes in ownership of the original Owner Participant, provided, however, that Owner Participant and Lessee agree to negotiate, in good faith, a cap to Lessee's liability for indemnity payments being insufficient attributable to cover principal and interest payments on the Equipment Notes;taxes incurred in sublessee's Home State with respect to each Permitted Sublessee; and (iiiii) in the case of the Indenture Trustee or the Trust Indenture Estate Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference) imposed on such Indemnitee by a Taxing Authority in or of any foreign jurisdiction or a territory or possession of the United States, other than any such Tax which would not have been imposed in the absence of such Indemnitee's (including for purposes of this definition, all entities with which such Indemnitee is combined, integrated, or consolidated in such Taxing Authority's jurisdiction) engaging in business, maintaining an office or other place of business or otherwise being located in such jurisdiction other than merely by reason of such Indemnitee's participation in the transactions contemplated by the Operative Documents; and (iv) in the case of the Indenture Trustee or the Trust Indenture Estate, a tax imposed by any Taxing Authority other than the Federal government of the United States of America based on, or measured by gross income or receipts (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference), to the extent such Tax is.

Covered Income Tax. For purposes of clause (ii) of subsection (b)(i) and (b)(iib) of this Section 10, a Covered Income Tax meansincludes: (i) in the case of any an Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax imposed on, based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes or property taxes) imposed on an Indemnitee (A) -58- 60 by any state or local Taxing Authority other than Taxes imposed by any such state or local jurisdiction in whose jurisdiction such which the Indemnitee did not otherwise have sufficient has its principal place of business activities or business presence to be is subject to tax such Tax as a result of business transactions or other presence unrelated to the transactions contemplated by the Financing Documents or the Operative Documents, unless such Taxes are imposed by such jurisdiction solely as a result of (x) the operation of the Aircraft in such jurisdiction or (y) the transactions contemplated by the Operative Documents, to the extent such taxes are directly attributable to such operation of the Aircraft or to such transactions. For purposes , and (B) by any foreign jurisdiction which are imposed as a result of determining whether Lessee's or not sublessee's activities in such foreign jurisdiction in connection with the Indemnitee engaged in transactions contemplated by the Financing Documents or the Operative Documents, provided, however, a Covered Income Tax also includes the incremental amount of franchise taxes, taxes on doing business, maintained an office capital stock taxes or taxes on, based on or measured by gross or net income of the original Owner Participant attributable to the Lease (excluding, however, any taxes that would be excluded under any provision other place ofthan clauses (i) and (ii) of subsection (b) of this Section 10) which are imposed by the "Home State" of a sublessee (the Home State of a sublessee being the jurisdiction in which such sublessee maintains its principal operations and maintenance center), or in the absence of a Permitted Sublessee, the jurisdiction where the Aircraft is stored, but only to the extent such incremental taxes result from activities of Lessee or Permitted Sublessee under the Lease in or with respect to the Home State or the jurisdiction where the Aircraft is stored, and taking into account in calculating such incremental taxes all state tax benefits and savings in the Home State resulting from activities of Lessee or Permitted Sublessee under the Lease, disregarding for such purpose any actual or constructive changes in ownership of the original Owner Participant, provided, however, that Owner Participant and Lessee agree to negotiate, in good faith, a cap to Lessee's liability for indemnity payments attributable to taxes incurred in sublessee's Home State with respect to each Permitted Sublessee; and (ii) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes, or property taxes) imposed on such Indemnitee by any foreign jurisdiction (i) which are imposed as a result of Lessee's or sublessee's activities in such foreign jurisdiction in connection with the transactions contemplated by the Operative Documents or (ii) which are withholding taxes on Basic Rent to the extent such withholding taxes would otherwise result in Basic Rent payments being insufficient to cover principal and interest payments on the Equipment Notes; (iii) in the case of the Indenture Trustee or the Trust Indenture Estate any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (including minimum taxes, withholding taxes, -59- 61 and taxes on or measured by any item of tax preference) imposed on such Indemnitee by a Taxing Authority in or of any foreign jurisdiction or a territory or possession of the United States, other than any such Tax which would not have been imposed in the absence of such Indemnitee's (including for purposes of this definition, all entities with which such Indemnitee is combined, integrated, or consolidated in such Taxing Authority's jurisdiction) engaging in business, maintaining an office or other place of business or otherwise being located in such jurisdiction other than merely by reason of such Indemnitee's participation in the transactions contemplated by the Operative Documents; and (iv) in the case of the Indenture Trustee or the Trust Indenture Estate, a tax imposed by any Taxing Authority other than the Federal government of the United States of America based on, or measured by gross income or receipts (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference), to the extent such Tax is.

Covered Income Tax. For purposes of subsection (b)(i) and (b)(ii) of this Section 10, a Covered Income Tax means (i) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes or property taxes) imposed on an Indemnitee by any state or local Taxing Authority in whose jurisdiction such Indemnitee did not otherwise have sufficient business activities or business presence to be subject to tax solely as a result of (x) the operation of the Aircraft in such jurisdiction or (y) the transactions contemplated by the Operative Documents, to the extent such taxes are directly attributable to such operation of the Aircraft or to such transactions. For purposes of determining whether or not the Indemnitee engaged in business, maintained an office or other place ofof business or was otherwise located in the jurisdiction of a Taxing Authority, Indemnitee shall be defined as including all entities with which such Indemnitee is combined, integrated or consolidated in such Taxing Authority's jurisdiction; (ii) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes, or property taxes) imposed on such Indemnitee by any foreign jurisdiction (i) which are imposed as a result of Lessee's or sublessee's activities in such foreign jurisdiction in connection with the transactions contemplated by the Operative Documents or (ii) which are withholding taxes on Basic Rent to the extent such withholding taxes would otherwise result in Basic Rent payments being insufficient to cover principal and interest payments on the Equipment Notes; (iii) in the case of the Indenture Trustee or the Trust Indenture Estate any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference) imposed on such Indemnitee by a Taxing Authority in or of any foreign jurisdiction or a territory or possession of the United States, other than any such Tax which would not have been imposed in the absence of such Indemnitee's (including for purposes of this definition, all entities with which such Indemnitee is combined, integrated, or consolidated in such Taxing Authority's jurisdiction) engaging in business, maintaining an office or other place of business or otherwise being located in such jurisdiction other than merely by reason of such Indemnitee's participation in the transactions contemplated by the Operative Documents; andwould (iv) in the case of the Indenture Trustee or the Trust Indenture Estate, a tax imposed by any Taxing Authority other than the Federal government of the United States of America based on, or measured by gross income or receipts (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference), to the extent such Tax isis attributable to the operation or registration of the Aircraft in such jurisdiction or to the transactions contemplated by the Operative Documents or is the result of the activities of Lessee, sublessee, or any Affiliate of either thereof in such jurisdiction, including residence.

Covered Income Tax. For purposes of subsection clauses (b)(ii) and (b)(iiii) of subsection (b) of this Section 10, a Covered Income Tax meansincludes: (i) in the case of any an Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax imposed on, based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes or property taxes) imposed on an Indemnitee (A) by any state or local Taxing Authority other than Taxes imposed by any such state or local jurisdiction in whose jurisdiction such which the Indemnitee did not otherwise have sufficient has its principal place of business activities or business presence to be is subject to tax such Tax as a result of business transactions or other presence unrelated to the transactions contemplated by the Financing Documents or the Operative Documents, unless such Taxes are imposed by such jurisdiction solely as a result of (x) the operation of the Aircraft Engine in such jurisdiction or (y) the transactions -52- 58 contemplated by the Operative Documents, to the extent such taxes are directly attributable to such operation of the Aircraft Engine or to such transactions. For purposes of determining whether or not the Indemnitee engaged in business, maintained an office or other place of and (iiB) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes, or property taxes) imposed on such Indemnitee by any foreign jurisdiction (i) which are imposed as a result of Lessee's or sublessee's activities in such foreign jurisdiction in connection with the transactions contemplated by the Operative Financing Documents or the Operative Documents, provided, however, a Covered Income Tax also includes the incremental amount of franchise taxes, taxes on doing business, capital stock taxes or taxes on, based on or measured by gross or net income of the original Owner Participant attributable to the Lease (excluding, however, any taxes that would be excluded under any provision other than clauses (i) and (ii) of subsection (b) of this Section 10) which are withholding taxes on Basic Rent imposed by the "Home State" of a sublessee (the Home State of a sublessee being the jurisdiction in which such sublessee maintains its principal operations and maintenance center), or in the absence of a [Permitted Sublessee], the jurisdiction where the Engine is stored, but only to the extent such withholding incremental taxes would otherwise result from activities of Lessee [or Permitted Sublessee] under the Lease in Basic Rent or with respect to the Home State or the jurisdiction where the Engine is stored, and taking into account in calculating such incremental taxes all state tax benefits and savings in the Home State resulting from activities of Lessee [or Permitted Sublessee] under the Lease, disregarding for such purpose any actual or constructive changes in ownership of the original Owner Participant, provided, however, that Owner Participant and Lessee agree to negotiate, in good faith, a cap to Lessee's liability for indemnity payments being insufficient attributable to cover principal and interest payments on the Equipment Notes;taxes incurred in sublessee's Home State with respect to each [Permitted Sublessee]; and (iiiii) in the case of the Indenture Trustee or the Trust Indenture Estate Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference) imposed on such Indemnitee by a Taxing Authority in or of any foreign jurisdiction or a territory or possession of the United States, other than any such Tax which would not have been imposed in the absence of such Indemnitee's (including for purposes of this definition, all entities with which such Indemnitee is combined, integrated, or consolidated in such Taxing Authority's jurisdiction) engaging in business, maintaining an office or other place of business or otherwise being located in such jurisdiction other than merely by reason of such Indemnitee's participation in the transactions contemplated by the Operative Documents; and (iv) in the case of the Indenture Trustee or the Trust Indenture Estate, a tax imposed by any Taxing Authority other than the Federal government of the United States of America based on, or measured by gross income or receipts (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference), to the extent such Tax is.

Covered Income Tax. For purposes of clause (ii) of subsection (b)(i) and (b)(iib) of this Section 10, a Covered Income Tax meansincludes: (i) in the case of any an Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax imposed on, based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes or property taxes) imposed on an Indemnitee (A) by any state or local Taxing Authority other than Taxes imposed by any such state or local jurisdiction in whose jurisdiction such which the Indemnitee did not otherwise have sufficient has its principal place of business activities or business presence to be is subject to tax such Tax as a result of business transactions or other presence unrelated to the transactions contemplated by the Financing Documents or the Operative Documents, unless such Taxes are imposed by such jurisdiction solely as a result of (x) the operation of the Aircraft in such jurisdiction or (y) the transactions contemplated by the Operative Documents, to the extent such taxes are directly attributable to such operation of the Aircraft or to such transactions. For purposes of determining whether or not the Indemnitee engaged in business, maintained an office or other place of and (iiB) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes, or property taxes) imposed on such Indemnitee by any foreign jurisdiction (i) which are imposed as a result of Lessee's or sublessee's activities in such foreign jurisdiction in connection with the transactions contemplated by the Operative Documents or or (ii) which are withholding taxes on Basic Rent to the extent such withholding taxes would otherwise result in Basic Rent payments being insufficient to cover principal and interest payments on the Equipment Notes; (iii) in the case of the Indenture Trustee or the Trust Indenture Estate Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference) imposed on such Indemnitee by a Taxing Authority in or of any foreign jurisdiction or a territory or possession of the United States, other than any such Tax which would not have been imposed in the absence of such Indemnitee's (including for purposes of this definition, all entities with which such Indemnitee is combined, integrated, or consolidated in such Taxing Authority's jurisdiction) engaging in business, maintaining an office or other place of business or otherwise being located in such jurisdiction other than merely by reason of such Indemnitee's participation in -59- 61 the transactions contemplated by the Operative Documents; and (iviii) in the case of the Indenture Trustee Trustee, or the Trust Indenture Estate, a tax imposed by any Taxing Authority other than the Federal government of the United States of America based on, or measured by gross income or receipts (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference), to the extent such Tax isis attributable to the operation of registration of the Aircraft in such jurisdiction or to the transactions contemplated by the Operative Documents or is the result of the activities of Lessee, sublessee, or any Affiliate of either thereof in such jurisdiction, including residence.

Covered Income Tax. For purposes of clause (ii) of subsection (b)(i) and (b)(iib) of this Section 10, a Covered Income Tax meansincludes: (i) in the case of any an Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax imposed on, based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes or property taxes) imposed on an Indemnitee (A) 60 by any state or local Taxing Authority other than Taxes imposed by any such state or local jurisdiction in whose jurisdiction such which the Indemnitee did not otherwise have sufficient has its principal place of business activities or business presence to be is subject to tax such Tax as a result of business transactions or other presence unrelated to the transactions contemplated by the Financing Documents or the Operative Documents, unless such Taxes are imposed by such jurisdiction solely as a result of (x) the operation of the Aircraft in such jurisdiction or (y) the transactions contemplated by the Operative Documents, to the extent such taxes are directly attributable to such operation of the Aircraft or to such transactions. For purposes of determining whether or not the Indemnitee engaged in business, maintained an office or other place of and (iiB) in the case of any Indemnitee other than the Indenture Trustee or the Trust Indenture Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (other than taxes which are in the nature of sales or use taxes, license taxes, or property taxes) imposed on such Indemnitee by any foreign jurisdiction (i) which are imposed as a result of Lessee's or sublessee's activities in such foreign jurisdiction in connection with the transactions contemplated by the Operative Financing Documents or the Operative Documents, provided, however, a Covered Income Tax also includes the incremental amount of franchise taxes, taxes on doing business, capital stock taxes or taxes on, based on or measured by gross or net income of the original Owner Participant attributable to the Lease (excluding, however, any taxes that would be excluded under any provision other than clauses (i) and (ii) of subsection (b) of this Section 10) which are withholding taxes on Basic Rent imposed by the "Home State" of a sublessee (the Home State of a sublessee being the jurisdiction in which such sublessee maintains its principal operations and maintenance center), or in the absence of a Permitted Sublessee, the jurisdiction where the Aircraft is stored, but only to the extent such withholding incremental taxes would otherwise result from activities of Lessee or Permitted Sublessee under the Lease in Basic Rent or with respect to the Home State or the jurisdiction where the Aircraft is stored, and taking into account in calculating such incremental taxes all state tax benefits and savings in the Home State resulting from activities of Lessee or Permitted Sublessee under the Lease, disregarding for such purpose any actual or constructive changes in ownership of the original Owner Participant, provided, however, that Owner Participant and Lessee agree to negotiate, in good faith, a cap to Lessee's liability for indemnity payments being insufficient attributable to cover principal and interest payments on the Equipment Notes;taxes incurred in sublessee's Home State with respect to each Permitted Sublessee; and (iiiii) in the case of the Indenture Trustee or the Trust Indenture Estate Estate, any Tax based on or measured by gross or net income, receipts, capital or net worth, franchises, excess profits or conduct of business (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference) imposed on such Indemnitee by a Taxing Authority in or of any foreign jurisdiction or a territory or possession of the United States, other than any such Tax which would not have been imposed in the absence of such Indemnitee's (including for purposes of this definition, all entities with which such Indemnitee is combined, integrated, or consolidated in such Taxing Authority's jurisdiction) engaging in business, maintaining an office or other place of business or otherwise being located in such jurisdiction other than merely by reason of such Indemnitee's participation in the transactions contemplated by the Operative Documents; and (iv) in the case of the Indenture Trustee or the Trust Indenture Estate, a tax imposed by any Taxing Authority other than the Federal government of the United States of America based on, or measured by gross income or receipts (including minimum taxes, withholding taxes, and taxes on or measured by any item of tax preference), to the extent such Tax isor