Common use of Foreign Tax Credit Indemnity Clause in Contracts

Foreign Tax Credit Indemnity. If, as a result of the use or operation or location of the Aircraft outside the United States by Lessee, more than the *% (the "Permitted Percentage") of any item of income, deduction, or loss with respect to the transactions contemplated by the Lease will be treated for Federal income tax purposes as derived from, or allocable to, sources outside the United States (an "Excess Foreign Allocation"), and if as a result thereof the amount of the foreign tax credits available for utilization by the Lessor for any taxable year shall be less than the amount of the foreign tax credits that would have been available for utilization by the Lessor if the Lessee had not used the Aircraft outside the United States more than the Permitted Percentage (such event being referred to herein as a "Foreign Tax Credit Loss"), then the Lessee shall pay to the Lessor as an indemnity an amount which, after deduction of the amount of all additional federal, state, local and foreign taxes actually required to be paid by the Lessor in respect of the receipt or accrual of such amount, is equal to the actual increase in the Federal income taxes payable by (or not refundable to) the Lessor for such taxable year as a result of such Foreign Tax Credit Loss, plus the amount of any interest, penalties and additions to tax payable by the Lessor as a result of such Foreign Tax Credit Loss.