Sublessor claiming deductions for
depreciation of the Aircraft for federal income tax purposes or claiming on any
federal income tax return to be the owner of the Aircraft for federal income tax
purposes;
(z)
the status of Sublessor as a "tax-exempt
entity" within the meaning of Section 168(h) of the Code but only if such status
is not caused by a Sublessee Person.
(3)
TAX SAVING.
IF HEAD LESSOR OR THE OWNER
PARTICIPANT PAYS AN AMOUNT TO SUBLESSOR PURSUANT TO SECTION 4(C) OF THE TAX
INDEMNITY AGREEMENT, FOR WHICH SUBLESSEE HAS PREVIOUSLY PAID AN INDEMNITY TO
SUBLESSOR PURSUANT TO PARAGRAPH (1) HEREOF, SUBLESSOR SHALL PAY SUCH AMOUNT TO
SUBLESSEE WITHIN 5 BUSINESS DAYS AFTER SUBLESSOR RECEIVES SUCH AMOUNT, BUT NOT
IN EXCESS OF ANY PAYMENT PREVIOUSLY MADE BY SUBLESSEE WITH RESPECT TO SUCH TIA
LIABILITY AND NET OF ANY TAX LIABILITY INCURRED BY SUBLESSOR WITH RESPECT TO
RECEIPT AND PAYMENT OF SUCH AMOUNT.
(4)
CONTEST.
IF SUBLESSOR RECEIVES A WRITTEN
CLAIM FOR AN INDEMNITY PURSUANT TO THE TAX INDEMNITY AGREEMENT FOR WHICH
SUBLESSEE WOULD BE REQUIRED TO PAY SUBLESSOR AN INDEMNITY HEREUNDER, SUBLESSOR
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SHALL NOTIFY SUBLESSEE THEREOF IN WRITING (BUT IT BEING UNDERSTOOD AND AGREED
THAT FAILURE OF SUBLESSOR TO PROVIDE SUCH NOTICE TO SUBLESSEE SHALL NOT
ADVERSELY AFFECT OR OTHERWISE PREJUDICE ANY SUBLESSOR'S RIGHT TO AN INDEMNITY
HEREUNDER).
IF REQUESTED BY SUBLESSEE IN WRITING WITHIN TEN (10) BUSINESS DAYS
BEFORE THE LATEST DAY ON WHICH SUBLESSOR MAY REQUEST A CONTEST PURSUANT TO
SECTION 6 OF THE TAX INDEMNITY AGREEMENT, SUBLESSOR SHALL EXERCISE ITS RIGHTS,
IF ANY, UNDER SECTION 6 OF THE TAX INDEMNITY AGREEMENT PROVIDED THAT IN NO EVENT
SHALL SUBLESSOR BE REQUIRED TO INITIATE OR CONTINUE (OR BE REQUIRED TO REQUEST
ANY OTHER PERSON TO INITIATE OR CONTINUE) A CONTEST UNLESS: (I) THE AMOUNT OF
THE OBLIGATION ON THE PART OF SUBLESSEE TO INDEMNIFY SUBLESSOR PURSUANT TO
SUBSECTION (1) HEREOF SHALL BE AT LEAST $***, (II)
SUBLESSEE AGREES TO
REIMBURSE SUBLESSOR ON DEMAND (AND COMPLIES WITH SUCH AGREEMENT) FOR ALL OF THE
OWNER PARTICIPANT'S AND SUBLESSOR'S REASONABLE COSTS AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE LEGAL AND ACCOUNTING FEES AND DISBURSEMENTS)
WHICH EACH MAY INCUR IN CONTESTING SUCH DISALLOWANCE, (III) IF OWNER PARTICIPANT
ELECTS TO CONTEST THE DISALLOWANCE BY PAYING THE TAX CLAIMED (INCLUDING
INTEREST, PENALTIES OR ADDITIONS TO TAX) AND SEEKING A REFUND, SUBLESSEE SHALL
ADVANCE TO SUBLESSOR ON AN INTEREST FREE BASIS THE AGGREGATE AMOUNT OF TAXES,
INTEREST, PENALTIES AND ADDITIONS TO THE TAX APPLICABLE TO SUCH DISALLOWANCE AND
AGREE TO INDEMNIFY SUBLESSOR AND THE OWNER PARTICIPANT FOR ANY ADVERSE TAX
CONSEQUENCES RESULTING FROM SUCH ADVANCE, (IV) SUCH CONTEST WOULD NOT ENTAIL ANY
RISK OF CRIMINAL PENALTIES, (V) WITH RESPECT TO SUCH DISALLOWANCE, SUBLESSEE
SHALL HAVE FURNISHED SUBLESSOR AT SUBLESSEE'S EXPENSE, WITH A WRITTEN OPINION OF
INDEPENDENT TAX COUNSEL SELECTED BY SUBLESSOR THAT A REASONABLE BASIS EXISTS TO
CONTEST SUCH DISALLOWANCE AND PRIOR TO FILING ANY APPEAL AN OPINION THAT A
SUCCESSFUL OUTCOME ON APPEAL IS MORE LIKELY THAN NOT AND HAVE POSTED A BOND