Indemnity Payment Conditions. If, by reason of any act or omission of Lessee or by any other Person in possession of the Property or any portion thereof or by reason of the inaccuracy or breach by Lessee of any of the representations, warranties and covenants contained in this Section 19.03, any anticipated depreciation deductions are lost, disallowed, eliminated, reduced, recaptured, compromised, delayed or otherwise made unavailable to Lessor (or Head Lessor with respect to the Equipment), as the case may be, (a "Loss") or Lessor or Head Lessor incurs a tax detriment because it is required to include amounts in income other than Anticipated Lease Income (an "Inclusion"), Lessee shall, upon notice from Lessor or Head Lessor promptly pay such Person on demand in immediately available funds, as an indemnity an amount which, on an After-Tax Basis, shall be equal to the sum of (x) the increase in federal, state and local income tax liability for the respective taxable year attributable to such Loss or Inclusion plus (y) the amounts of interest, penalties and additions to tax (including, without limitation, any additions to tax because of underpayment of estimated tax), which are assessed against Lessor or Head Lessor for such taxable year by the Internal Revenue Service ("IRS") or any relevant state, local or foreign taxing authority and which are attributable to such Loss or Inclusion.
Indemnity Payment Conditions. (i) If, by reason of any act or omission of Lessee or by any other Person in possession of the Properties, or by reason of the inaccuracy or breach by Lessee of any of the representations, warranties and covenants contained in Section 18B(b), tax benefits resulting from the Tax Assumptions are lost, disallowed, eliminated, reduced, recaptured, compromised, delayed or otherwise made unavailable to Lessor or (ii) Lessor incurs a tax detriment because it is required to include amounts in income other than as contemplated in the Tax Assumptions, Lessee shall, upon notice by Lessor, promptly pay to Lessor on demand in immediately available funds, an indemnity payment determined on an After Tax Basis, as reasonably computed by Lessor, equal to the amount of such lost tax benefits and such tax detriments incurred (computed at the Lessor's applicable federal and state tax rate and including without limitation the incurrence of any tax detriments as a result of the inclusion by Lessor in gross income of the aggregate indemnity payment pursuant to this Section 18B), plus any interest, penalties and additions to tax thereon and plus any expenses incurred by Lessor in connection therewith. Notwithstanding anything herein to the contrary, Lessee shall not be liable for any indemnity payment arising from a tax detriment as a result of any taxing authority's reallocation of the cost paid by Lessor for the Properties in a manner different from the allocation reflected in the applicable Lease Supplement unless arising from a direct act or omission of Lessee; provided, however, Lessee specifically acknowledges and agrees that the allocation reflected in the Lease Supplement is reasonable and reflects an appropriate allocation based on the respective fair market values of the classes of the Properties as set forth on such Lease Supplement. Lessee accordingly agrees that it will not take a reporting position for income tax purposes, ad valorem tax purposes or otherwise inconsistent with the allocation set forth on such Lease Supplement.
