Common use of General Indemnity Clause in Contracts

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 4 contracts

Samples: Participation Agreement (Us Airways Inc), Participation Agreement (Us Airways Inc), Participation Agreement (Us Airways Inc)

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General Indemnity. Lessee Subject to the next following paragraph but without limiting any other rights that any Indemnitee may have under the other Operative Documents or applicable law, the Borrower hereby agrees to indemnify each Indemnitee on an after-tax basis against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or Indemnitee arising out of or resulting from (Ai) the executionoperation, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacturepossession, purchaseuse, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturemaintenance, purchaseoverhaul, testing, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspectionnon-delivery, lease, subleasenonuse, modification, alteration, or sale of the Aircraft, the Airframe or any Engine, or any engine used in connection with the Airframe or any part of any of the foregoing by the Borrower, any lessee or any other Person whatsoever, whether or not such operation, possession, storage, use or non-use, operation, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition sale is in compliance with the terms of the Aircraft Mortgage, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any violation of law person whatsoever and claims relating to the Aircraft (any laws, rules or regulations pertaining to such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, sale or return including environmental control, noise and pollution laws), rules or regulations; (ii) the manufacture, design, purchase, acceptance, rejection, delivery, or condition of the Aircraft, the Airframe or any Engine, any engine used in connection with the Airframe, or any part of any of the foregoing including, without limitation, latent or and other defects, whether or not discoverable, strict tort liability and any claim for patent, or trademark or copyright infringement; (Diii) any breach of or failure to perform or observe, or any other noncompliance with, any covenant or agreement to be performed, or other obligation of the offer Borrower under any of the Operative Documents, or sale the falsity of any interest representation or warranty of the Borrower in any of the Trust Estate Operative Documents; and (iv) any Event of Default hereunder or the Trust Agreement or any similar interest on or prior to enforcement against the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale Borrower of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISAincluding, without limitation, Section 12 hereof); provided, that the . The foregoing indemnity shall not extend to an Indemnitee with respect to any Expense of any Indemnitee to the extent such Expense is attributable to one or more of the following: (1) any representation acts or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) omissions involving the willful misconduct or the gross negligence of such Indemnitee, Indemnitee or (4) (A) in the case any Person acting on behalf of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part (other than gross negligence imputed to such Indemnitee solely by reason of its interest in the Airframe or Aircraft, as finally determined by a court of competent jurisdiction); (2) any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTax, or increase in tax liability under any tax law (5such matter being subject to the indemnity in Sections 8(b) any Tax and (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 belowc) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(bhereof); (3) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Administrative Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement Operative Documents any amounts received and distributable by it thereunder; (4) any breach of undertaking or any misrepresentation contained herein or in any other Operative Document to which such Indemnitee is a party or any agreement relating hereto or thereto by such Indemnitee and in each case not attributable directly to any breach of undertaking, any misrepresentation or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents noncompliance with respect to any of the Operative Documents which amendments, supplements, waivers terms hereof or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (any other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable agreement relating hereto or thereto by Lessee under the Operative Documents, Borrower; (5) a Lender Lien; or (136) any amount that is an ordinary and usual operating a violation of the Securities Act relating to or overhead expense arising out of any the offer, issuance, sale or delivery by such Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which person who controls such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 15 of ERISA or Section 4975(c)(1the Securities Act) of any security based upon the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 credit of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the AircraftBorrower. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee (or its agent) shall promptly after receiving such notice give notice of such claim to Lesseethe Borrower; provided that the failure to give provide such notice shall not affect release the Borrower from any of its obligations of Lessee to indemnify hereunder except to the extent Lessee that the Borrower is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of the failure to give such failurenotice in a timely fashion, and no payment by the Borrower to an Indemnitee pursuant to this Section 8(a) shall be deemed to constitute a waiver or release of any right or remedy which the Borrower may have against such Indemnitee for any actual damages as a result of the failure by such Indemnitee to give the Borrower such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Borrower shall be entitled, at its sole cost and expense, acting through a single counsel reasonably acceptable to the respective Indemnitee, so long as the Borrower has acknowledged in writing its responsibility for such Expense hereunder (unless such Expense is covered by the second paragraph of this Section 8(a), except that such acknowledgment does not apply if the decision of a court or arbitrator provides that the Borrower is not liable hereunder), (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best reasonable efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lesseethe Borrower's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Borrower pursuant to the preceding provisions. Notwithstanding any of the foregoing, the Borrower shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if any Event of Default shall have occurred and be continuing, if such proceedings will involve a material risk of the sale, forfeiture or loss of the Aircraft unless the Borrower shall have posted a bond or other security reasonably satisfactory to the relevant Indemnitee with respect to such risk or if such proceedings could entail any risk of criminal liability being imposed on such Indemnitee. The affected Indemnitee shall supply Lessee the Borrower with such information reasonably requested by Lessee the Borrower as is necessary or advisable for Lessee the Borrower to control or participate in any proceeding to the extent permitted by this Section 6(c8(a). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Borrower, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c8(a). The Lessee shall supply In the case of any Expense indemnified by Borrower hereunder which is covered by a policy of insurance maintained by Borrower, each Indemnitee agrees, at Borrower's expense, to cooperate reasonably with the insurers in the exercise of their rights to investigate, defend or compromise such information loss or liability as may be reasonably requested by required to retain the Indemnitee as is necessary benefits of such insurance with respect to such loss or advisable for the Indemnitee to control or participate in any proceeding to liability. To the extent permitted by this Section 6(c). Upon of any payment of any Expense pursuant to this Section 6(c8(a), Lesseethe Borrower, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Borrower to permit Lessee the Borrower to pursue such claims, if any, to the extent reasonably requested by Lesseethe Borrower. If In the event that the Borrower shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 8(a), and such Indemnitee subsequently shall be reimbursed in whole or in partrespect of such indemnified amount from any other Person, with respect to any Expense paid by Lessee hereunder, it will such Indemnitee shall promptly pay the Borrower the amount refundedof such reimbursement, including interest received thereto (but not an amount in excess of the amount Lessee attributable thereto, provided that no Special Default or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person continuing. Amounts payable under the Lease or any other Operative Document. Any such amount this Section 8(a) shall be held payable by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event Borrower within thirty days of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentencedemand therefor.

Appears in 4 contracts

Samples: Credit Agreement (Frontier Airlines Inc /Co/), Credit Agreement (Frontier Airlines Inc /Co/), Credit Agreement (Frontier Airlines Inc /Co/)

General Indemnity. Except as otherwise expressly set forth in Section 1.03, Lessee hereby agrees to indemnify indemnify, reimburse, hold harmless and defend each Indemnitee againstfrom and against any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and agrees to protectany reasonable attorneys' fees and other reasonable costs and expenses in connection herewith, save (including any of the foregoing arising or imposed with or without fault of any Indemnitee, or under the doctrine of absolute or strict liability) and keep harmless each of them including any third party claims arising from (whether or not the transactions contemplated herein or in any way connected with injury to or death of the other Operative Documents are consummated), any Person or loss or damage to property (any and all Expenses imposed on, incurred by or asserted against any Indemnitee, of which are hereafter referred to as "CLAIMS") which in any way relating toresult from, based on pertain to or arising arise out of of, or are in any manner related to (Aa) the executionLease, delivery and performance of the any other Operative Documents Document or the Pass Through Documents and Manufacturer Purchase Agreement or the transactions contemplated thereby; breach of any representation, warranty or covenant made by Lessee hereunder, thereunder or in any document delivered by Lessee in connection herewith or therewith, or (Bb) the condition, ownership, manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, acceptance, possession, storagereturn, use or non-disposition, use, operation, maintenance, overhaulrepair, modificationalteration or control of the Aircraft, alterationthe Airframe, conditionany Engine or any Part, replacementeither in the air or on the ground during the Term, or (c) any defect in the Aircraft, any Engine or any Part (whether or not discovered or discoverable by Lessee or Lessor) arising from the material or any articles used therein or from the design, testing, or use thereof or from any maintenance, service, repair, substitutionoverhaul, sale, return or other disposition testing of the Aircraft including, without limitationAircraft, any violation of law relating to the Aircraft (including environmental laws), latent Engine or other defectsany Part, whether or not discoverablethe Aircraft, strict tort liability and any claim for patent, trademark such Engine or copyright infringement; (D) the offer or sale of any interest such Part is in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation possession of securities laws or ERISA); or (E) the offer or sale Lessee, and regardless of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to where the Aircraft) on the Delivery Date , such Engine or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrectPart may then be located, or (2d) the failure by such Indemnitee to perform or observe any of its agreementstransaction, covenants or conditions in any of the Operative Documents or the Pass Through Documentsapproval, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) document contemplated by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by the Manufacturer Purchase Agreement or given or entered into in connection herewith or therewith. Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to all rights and remedies that any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements against the Manufacturer and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease subcontractors or any other Operative Document. Any person as to any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) andClaims, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, but only to the extent that Lessee has no obligations hereunder paid in full to such Person, Indemnitee the amount claimed by it hereunder with respect to such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceClaims.

Appears in 3 contracts

Samples: Assignment and Assumption Agreement (Republic Airways Holdings Inc), Assignment and Assumption Agreement (Republic Airways Holdings Inc), Assignment and Assumption Agreement (Republic Airways Holdings Inc)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to The Company will at all times protect, indemnify and save harmless the Collateral Agent, each holder and keep harmless each of them their respective officers, directors, employees, agents and representatives (referred too herein as the “Indemnitees”) from and against all liabilities, obligations, claims, judgments, damages, penalties, fines, assessments, losses, indemnities, contributions, causes of action, costs and expenses (whether including, without limitation, the fees and expenses of attorneys, auditors and consultants) imposed upon or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based the Indemnitees on or arising out account of (Aa) the execution, delivery and performance any failure of the Operative Documents Company or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance any Subsidiary or rejection any employee or agent of any thereof to comply with any of the Airframe terms, covenants, obligations or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out prohibitions of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust this Agreement or any similar interest on or prior to the Delivery Date other Transaction Document, (including b) any violation of securities laws or ERISA); or (E) the offer or sale breach of any interest in the Equipment Notes representation or the Pass Through Certificates (or other evidence warranty of the debt relating Company or any Subsidiary set forth in this Agreement or in any other Transaction Document or any certificate delivered by the Company or any Subsidiary pursuant hereto or thereto, or any claim that any statement, representation or warranty of the Company or any Subsidiary in any of the foregoing documents contains or contained any untrue or misleading statement of material fact or omits or omitted to state any material facts necessary to make the Aircraftstatements made therein not misleading in light of the circumstances under which they were made, (c) on the Delivery Date any action, suit, claim, proceeding or investigation of a judicial, legislative, administrative or regulatory nature arising from or in connection with a refinancing in accordance with the terms hereof Collateral, including without limitation (including 1) the presence, escape, seepage, leakage, discharge, emission, release, removal or threatened release, or disposal of any Hazardous Materials and (2) any violation of securities laws any law, ordinance or ERISA); providedgovernmental rules or regulations including without limitation any Environmental Law, (d) any suit, action, administrative proceeding, enforcement action, or governmental or private action of any kind whatsoever commenced against the Company, any Subsidiary or any Indemnitee which might adversely affect the validity or enforceability of this Agreement or any other Transaction Document or the performance by the Company or any Subsidiary of any of its obligations hereunder or thereunder or (e) any loss or damage to property or any injury to or death of any Person that the foregoing indemnity shall not extend to an Indemnitee with respect may be occasioned by any cause whatsoever pertaining to any Expense to Collateral or the extent such Expense is attributable to one or more of use thereof, and shall further indemnify and save harmless the following: Indemnitees from and against (1) all amounts paid in settlement of any representation litigation commenced or warranty by such reasonably threatened against any Indemnitee in that falls within the Operative Documents or the Pass Through Documents being incorrectscope of clauses (a) through (e) above, or and (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) all expenses reasonably incurred in the case investigation of, preparation for or defense of any Indemniteelitigation, the offer, sale proceeding or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case investigation of any Indemnitee, nature whatsoever that falls within the offer, sale or other disposition by such Indemnitee scope of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents clauses (a) are not through (e) above, commenced or were not requested by Lessee or (b) are not occasioned by a specific requirement of reasonably threatened against the Operative DocumentsCompany, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document Subsidiary or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 3 contracts

Samples: Intercreditor Agreement (Modine Manufacturing Co), Note Purchase Agreement (Modine Manufacturing Co), Note Purchase Agreement (Modine Manufacturing Co)

General Indemnity. Lessee Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; or (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease)Engine, (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)Tax, or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (97) in the case of any Pass Through TrusteeTrustee or the Subordination Agent, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) 8) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee Owner or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (129) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense expense that is not reimbursable by Lessee Owner under the Operative Documents, or (1310) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (1511) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (1612) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (1713) any amount that constitutes principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. LesseeOwner's indemnity obligation to an Indemnitee under this Section 6(c6(b) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c6(b) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c6(b). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee Owner pursuant to this Section 6(c6(b) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is are not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee Owner an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c6(b) by Lessee Owner to such Indemnitee (less any payments previously made by such Indemnitee to Lessee Owner pursuant to this Section 6(c6(b)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee Owner to make payments to such Indemnitee pursuant to this Section 6(c6(b)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to LesseeOwner; provided that the failure to give such notice shall not affect the obligations of Lessee Owner hereunder except to the extent Lessee Owner is prejudiced by such failure or the LesseeOwner's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expensesexpenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), ) and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at LesseeOwner's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee Owner shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee Owner with such information reasonably requested by Lessee Owner as is necessary or advisable for Lessee Owner to control or participate in any proceeding to the extent permitted by this Section 6(c6(b). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of LesseeOwner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c6(b). The Lessee Owner shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c6(b). Upon payment of any Expense pursuant to this Section 6(c6(b), LesseeOwner, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee Owner to permit Lessee Owner to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceOwner.

Appears in 3 contracts

Samples: Participation Agreement (Us Airways Inc), Purchase Agreement (Us Airways Inc), Participation Agreement (Us Airways Inc)

General Indemnity. Subject to the other provisions of this Section 10.3, Lessee hereby agrees to pay, defend and indemnify and hold Lessor, Indenture Trustee, Administrative Agent and Collateral Agent and their respective Affiliates, successors and assigns (including any consolidated or combined group of which any such Person is a member) (each Indemnitee against, and agrees to protect, save and keep a "Tax Indemnitee") harmless each of them on an After-Tax Basis from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses federal, state, local and foreign taxes, excise taxes, fees, withholdings, levies, documentary stamps, imposts, duties, assessments, penalties and charges of any kind and nature whatsoever, together with any penalties, fines or interest thereon (herein called "Taxes") howsoever imposed, whether levied or imposed on, incurred by upon or asserted against any a Tax Indemnitee, Lessee, any Item of Equipment, or any part thereof, by any federal, state or local government or taxing authority in the United States, or by any way relating totaxing authority of a foreign country or subdivision thereof, based on upon or arising out of with respect to (Ai) the executionItems of Equipment, delivery and performance any Item of the Operative Documents Equipment or the Pass Through Documents and the transactions contemplated thereby; any part thereof, (Bii) the manufacture, purchaseconstruction, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufactureordering, purchase, registration, reregistration, financing, refinancingtransfer, ownership, transfer of ownership, titling or re-titling, registration or re-registration, delivery, nondeliveryleasing, inspection, lease, subleasesubleasing, possession, storage, use or non-use, operation, maintenance, overhaulstorage, modificationremoval, alterationreturn, conditionmortgaging, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale granting of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation in, transfers of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); providedtitle to, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offeracquisition, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9licensing, 10documentation, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offerrepossession, sale or other acquisition or disposition (voluntary or involuntary) by such Note Holder of all the Items of Equipment, any Item of Equipment or any part thereof, (iii) the revenues, rent, receipts or earnings arising from any Item of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in thereof, (iv) any Operative Document, (v) any Lease Payment or Supplemental Payment or any payment made to Lessor, Indenture Trustee or any Tranche A Noteholder, any Tranche B Lender, by Lessor or Lessee pursuant to the Operative Documents, or (5vi) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with otherwise in respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which thereof or any Indemnitee expressly transaction or transactions contemplated hereby or thereby. Lessee further agrees to pay under defend and indemnify and hold Lessor harmless on an After-Tax Basis from any Operative Document and all Taxes howsoever imposed, whether levied or imposed upon or asserted against any amount which is expressly stated to be an Expense that is not reimbursable Person by Lessee under any federal, state or local government or taxing authority in the Operative DocumentsUnited States, or (13) by any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means taxing authority of a foreign tax credit, depreciation country or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay subdivision thereof against which Lessor has agreed to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to indemnify such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceLessor Indemnity Agreement.

Appears in 3 contracts

Samples: Participation Agreement (Universal Compression Holdings Inc), Participation Agreement (Universal Compression Inc), Participation Agreement (BRL Universal Equipment Corp)

General Indemnity. (a) Lessee hereby agrees to indemnify indemnify, reimburse, and hold harmless each Indemnitee against, from and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), against any and all Expenses imposed onclaims, incurred by or asserted against any Indemniteedamages, in any way relating tolosses, based on or arising out of liabilities (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation claim or liability for strict liability in tort or otherwise imposed), obligations, demands, suits, judgments, causes of law relating action, legal proceedings, whether civil, criminal or administrative, penalties, fines, other sanctions, and all costs and expenses of any nature whatsoever, including attorney's fees and expenses (any and all of which are hereafter referred to as "Losses") which in any way at any time may result from, pertain to, or arise out of, the Aircraft, this Lease or any other Lessee Document, the lease of the Aircraft by Lessor to Lessee under the Lease, the breach of any representation, warranty or covenant made by Lessee hereunder or the condition, ownership, manufacture, purchase, delivery, non-delivery, acceptance, rejection, possession, return, disposition, subleasing, use or operation, maintenance, service, repair, overhaul, construction, design (including environmental laws)including, without limitation, latent or and other defects, defects whether or not discoverablediscovered or discoverable by the Indemnitee, strict tort liability and and, with respect to any Part installed on the Aircraft by Lessee, any claim for patent, trademark or copyright infringement; ), or acceptance (Din each and every case) of the offer Aircraft or sale of Airframe, any interest Engine or Part either in the Trust Estate air or on the Trust Agreement ground, or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest defect in the Equipment Notes Aircraft arising from the material or any articles used therein or from the Pass Through Certificates (design, testing or other evidence use thereof or from any maintenance, service, repair, overhaul or testing of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all Aircraft or any part Airframe, Engine or Part regardless of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9when such defect shall be discovered, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee such Aircraft or any Airframe, Engine or Part is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and at the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) time in the case possession of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest Lessee and whether it is in the Trust Estate or the Trust Agreement United States of America or any similar interest except during the continuance of an Event of Default so long as such disposition is made other country. The indemnities contained in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) 9.1 shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) continue in full force and effect notwithstanding the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss expiration or (IV) other termination of the Lease and payment by Lessee are expressly made for the benefit of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be enforceable by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective each Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 2 contracts

Samples: Aircraft Lease Agreement (Airlease LTD), Aircraft Lease Agreement (Airlease LTD)

General Indemnity. Lessee Subject to the next following paragraph but without limiting any other rights that any Indemnitee may have under the other Operative Documents or applicable law, the Borrower hereby agrees to indemnify each Indemnitee on an after-tax basis against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all \ Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or Indemnitee arising out of or resulting from (Ai) the executionoperation, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacturepossession, purchaseuse, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturemaintenance, purchaseoverhaul, testing, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspectionnon-delivery, lease, subleasenonuse, modification, alteration, or sale of any Aircraft, Airframe or Engine, or any engine used in connection with any Airframe or any part of any of the foregoing by the Borrower, any lessee or any other Person whatsoever, whether or not such operation, possession, storage, use or non-use, operation, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition sale is in compliance with the terms of the Aircraft Mortgage, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any violation of law person whatsoever and claims relating to the Aircraft (any laws, rules or regulations pertaining to such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, sale or return including environmental control, noise and pollution laws), rules or regulations; (ii) the manufacture, design, purchase, acceptance, rejection, delivery, or condition of any Aircraft, Airframe or Engine, any engine used in connection with any Airframe, or any part of any of the foregoing including, without limitation, latent or and other defects, whether or not discoverable, strict tort liability and any claim for patent, or trademark or copyright infringement; (Diii) any breach of or failure to perform or observe, or any other noncompliance with, any covenant or agreement to be performed, or other obligation of the offer Borrower under any of the Operative Documents, or sale the falsity of any interest representation or warranty of the Borrower in any of the Trust Estate Operative Documents; and (iv) any Event of Default hereunder or the Trust Agreement or any similar interest on or prior to enforcement against the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale Borrower of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISAincluding, without limitation, Section 12 hereof); provided, that the . The foregoing indemnity shall not extend to an Indemnitee with respect to any Expense of any Indemnitee to the extent such Expense is attributable to one or more of the following: (1) any representation acts or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) omissions involving the willful misconduct or the gross negligence of such Indemnitee, Indemnitee or (4) (A) in the case any Person acting on behalf of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part (other than gross negligence imputed to such Indemnitee solely by reason of its interest in the Airframe or an Aircraft, as finally determined by a court of competent jurisdiction); (2) any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTax, or increase in tax liability under any tax law (5such matter being the subject to the indemnity in Sections 8(b) any Tax and (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 belowc) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(bhereof); (3) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Administrative Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement Operative Documents any amounts received and distributable by it thereunder; (4) any breach of undertaking or any misrepresentation contained herein or in any other Operative Document to which such Indemnitee is a party or any agreement relating hereto or thereto by such Indemnitee and in each case not attributable directly to any breach of undertaking, any misrepresentation or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents noncompliance with respect to any of the Operative Documents which amendments, supplements, waivers terms hereof or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (any other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated agreement relating hereto or thereto by Borrower; (5) attributable to be an Expense that is not reimbursable by Lessee under the Operative Documents, a Lender Lien; or (136) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft Expenses as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen violation of the United States Securities Act (as defined below) relating to or arising out of the offer, issuance, sale or delivery by such Indemnitee (or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which person who controls such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 15 of ERISA or Section 4975(c)(1the Securities Act of 1933 (the "Securities Act"), as amended) of any security based upon the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 credit of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the AircraftBorrower. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee (or its agent) shall promptly after receiving such notice give notice of such claim to Lesseethe Borrower; provided that the failure to give provide such notice shall not affect release the Borrower from any of its obligations of Lessee to indemnify hereunder except to the extent Lessee that the Borrower is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of the failure to give such failurenotice in a timely fashion, and no payment by the Borrower to an Indemnitee pursuant to this Section 8(a) shall be deemed to constitute a waiver or release of any right or remedy which the Borrower may have against such Indemnitee for any actual damages as a result of the failure by such Indemnitee to give the Borrower such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Borrower shall be entitled, at its sole cost and expense, acting through a single counsel reasonably acceptable to the respective Indemnitee, so long as the Borrower has acknowledged in writing its responsibility for such Expense hereunder (unless such Expense is covered by the second paragraph of this Section 8(a), except that such acknowledgment does not apply if the decision of a court or arbitrator provides that the Borrower is not liable hereunder), (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best reasonable efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lesseethe Borrower's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Borrower pursuant to the preceding provisions. Notwithstanding any of the foregoing, the Borrower shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if any Event of Default shall have occurred and be continuing, if such proceedings will involve a material risk of the sale, forfeiture or loss of an Aircraft unless the Borrower shall have posted a bond or other security reasonably satisfactory to the relevant Indemnitee with respect to such risk or if such proceedings could entail any risk of criminal liability being imposed on such Indemnitee. The affected Indemnitee shall supply Lessee the Borrower with such information reasonably requested by Lessee the Borrower as is necessary or advisable for Lessee the Borrower to control or participate in any proceeding to the extent permitted by this Section 6(c8(a). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Borrower, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c8(a). The Lessee shall supply In the case of any Expense indemnified by Borrower hereunder which is covered by a policy of insurance maintained by Borrower, each Indemnitee agrees, at Borrower's expense, to cooperate reasonably with the insurers in the exercise of their rights to investigate, defend or compromise such information loss or liability as may be reasonably requested by required to retain the Indemnitee as is necessary benefits of such insurance with respect to such loss or advisable for the Indemnitee to control or participate in any proceeding to liability. To the extent permitted by this Section 6(c). Upon of any payment of any Expense pursuant to this Section 6(c8(a), Lesseethe Borrower, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Borrower to permit Lessee the Borrower to pursue such claims, if any, to the extent reasonably requested by Lesseethe Borrower. If In the event that the Borrower shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 8(a), and such Indemnitee subsequently shall be reimbursed in whole or in partrespect of such indemnified amount from any other Person, with respect to any Expense paid by Lessee hereunder, it will such Indemnitee shall promptly pay the Borrower the amount refundedof such reimbursement, including interest received thereto (but not an amount in excess of the amount Lessee attributable thereto, provided that no Special Default or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person continuing. Amounts payable under the Lease or any other Operative Document. Any such amount this Section 8(a) shall be held payable by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event Borrower within thirty days of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentencedemand therefor.

Appears in 2 contracts

Samples: Credit Agreement (Frontier Airlines Inc /Co/), Credit Agreement (Frontier Airlines Inc /Co/)

General Indemnity. The Lessee hereby agrees to indemnify each Indemnitee againstassumes liability for, and agrees to protect, save and keep harmless each of them from (whether or not any of the transactions contemplated herein hereby shall be consummated and whether or in not the Lease, any Lease Supplement or other Operative Document has expired or been terminated) agrees to defend, indemnify, protect, release, save and hold harmless and keep whole each Indemnified Person, on an After-Tax Basis, from and against any and all liabilities (including but not limited to liabilities arising out of the doctrine of strict liability or arising out of violation of regulatory requirements of any kind), obligations, losses, damages, penalties, claims (including Environmental Claims), actions, suits, judgments, costs, expenses, charges, fees and disbursements (including out of pocket fees and expenses, Fees and Expenses and costs of investigation), whether any of the other Operative Documents are consummated)foregoing be founded or unfounded, any of whatsoever kind and all Expenses nature (collectively, the "Claims") that may be imposed on, incurred by or asserted against any IndemniteeIndemnified Person or any Equipment, in any way relating to, based on to or arising out of (Aa) the execution, delivery and performance of Equipment or the Operative Documents (including, without limitation, the performance or enforcement of all obligations of the Lessee or the Pass Through Guarantor under the Operative Documents and the payments made pursuant thereto or any other transactions contemplated thereby; (B) thereby or the manufacturebreach of any covenant or agreement contained therein by the Lessee or the Guarantor, or the falsity of any representation or warranty made therein by the Lessee or the Guarantor), or the design, manufac- ture, construction, reassembly, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufactureacceptance, purchasepossession, registrationrejection, reregistrationcontrol, financing, refinancing, modification, alteration, testing, non-use, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenanceleasing, overhaul, modification, alterationsubleasing, condition, replacementmaintenance, repair, sale, abandonment, storage, substitution, saleinsurance, redelivery or de-installation, return or other disposition of the Aircraft Equipment or any Item thereof (whether or not such Equipment or Item is in compliance with the Operative Documents), (b) any other disposition of, or the imposition of any Lien (or incurrence of any liability to refund or pay over any amount as a result of any Lien) on, the Equipment or any interest therein, including, without limitation, any violation claim or penalty arising out of law relating to violations of Applicable Law, or in tort (whether creating a strict liability or otherwise) or arising from the Aircraft (including environmental laws)active or passive negligence of an Indemnified Person, latent or other defects, whether or not discoverablediscoverable by any Indemnified Person, strict tort liability or any other Person, loss of or damage to any property or the environment, death of or injury to any Person and any claim for patent, trademark or copyright infringement; , (Dc) the offer offer, issuance, sale, resale or sale delivery of any interest in the Trust Estate or the Trust Agreement Note or any similar direct or beneficial interest on under any Operative Document, (d) any Event of Default, any Event of Loss, any redemption, refunding, prepayment or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence transfer of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing Notes made in accordance with the terms hereof (including Operative Documents, any violation of securities laws amendment, modification or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect supplement to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrectDocument, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee transfer of all or any part of its the right, title and interest of the Owner Trustee or any Owner Participant in the Airframe Trust Estate or any Engine (other than during the continuance of a Lease Event of Default or pursuant in, to and in accordance with Sections 9, 10, 15 or 19 under any of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, (e) the presence, Release or threatened Release of any Hazardous Substance in, on, at or from any Item of Equipment or any facility or site in or on which any Item of Equipment is or was present, stored, used, recycled, managed, treated, disposed of, or located at any time, (f) any transport, treatment, recycling, storage, Release, disposal or arrangement therefor, of any Hazardous Substance generated by, used in connection with or otherwise present in or on any Item of Equipment or any facility or site in or on which any Item of Equipment is or was present, stored, used, recycled, managed, treated, disposed of, or located at any time, (g) any Environmental Law or any published policy or guidance document issued in connection therewith or demand of a Governmental Authority applicable in any way whatsoever related to any Item of Equipment or any facility or site in or on which any Item of Equipment is or was present, stored, used, recycled, managed, treated, disposed of, or located at any time, (h) any loss of or damage to any property, natural resources or the environment, or death of or injury to any Person, resulting from or relating to any Hazardous Substance that is or was present, used, generated, treated, stored, recycled, managed, transported or Released in connection with any Item of Equipment or any facility or site in or on which any Item of Equipment is or was present, stored, used, recycled, managed, treated, disposed of or otherwise located at any time or (5i) any Tax (other than taxes non- exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code Code; provided, that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is shall not be required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay 6.1 to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.indemnify:

Appears in 2 contracts

Samples: Participation Agreement (Zenith Electronics Corp), Participation Agreement (Zenith Electronics Corp)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee againstpay, and agrees on demand to protectindemnify and hold harmless, save Lessor and keep harmless each of them from its officers, directors, employees, servants, agents, shareholders, affiliates, successors, assigns and transferees (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummatedindividually, an "Indemnitee"), from and against any and all Expenses imposed onclaims, incurred by or asserted against any Indemniteedamages, in any way relating losses, liabilities (including, but not limited to, based on any claim or liability for strict liability in tort or otherwise, including, without limitation, liability arising under any applicable environment, noise or pollution control statute, rule or regulation), demands, suits, judgments, causes of action and all legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and any costs and expenses incurred in connection therewith, including reasonable attorney's fees, which may directly or indirectly result from, relate to or arise out of (A) the execution, delivery and performance assigned portions of the Operative Documents Purchase Agreement or this Lease or the Pass Through Documents and the transactions contemplated thereby; (B) the condition, ownership, manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturetest flight, purchase, registration, reregistration, financing, refinancing, ownershipinspection, delivery, nondelivery, inspectionacceptance, nonacceptance, rejection, import, export, registration, lease, sublease, possession, control, storage, return, transportation, disposition, use or non-useoperation of any Item of Equipment (except as to an Indemnitee for claims that are the result of the gross negligence or willful misconduct of such Indemnitee), operationor which may be caused by any malfunction or defect in any Item of Equipment, latent or otherwise, arising from the material or any article used therein or from the design, testing or use thereof or from any maintenance, service, repair, overhaul, modificationimprovement, alterationmodification or alteration thereof, condition, replacement, repair, substitution, sale, return or other disposition regardless of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defectswhen such defect shall be discovered, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) such Item of Equipment is at the offer or sale of any interest time in the Trust Estate possession of Lessee and wherever located. Notwithstanding anything to the contrary contained in this Article 8(a), the indemnification provided for in this Article 8(a) shall only apply to events or the Trust Agreement or any similar interest on or circumstances which either (i) occur prior to the Delivery Date (including any violation expiration or sooner termination of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a this Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms hereof, regardless of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian)when asserted, or (ii) are caused by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account attributable to acts or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent omissions of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable lawofficers, interest at the Base Rate plus one percent (1.0%) shall be paiddirectors, on demandemployees, on any amount servants, agents, contractors or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceaffiliates.

Appears in 2 contracts

Samples: Lease Agreement (Hawaiian Airlines Inc/Hi), Lease Agreement (Hawaiian Airlines Inc/Hi)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to The Borrower will at all times protect, indemnify and save harmless the Collateral Agent, each Lender and keep harmless each of them their respective officers, directors, employees, agents and representatives (referred too herein as the “Indemnitees”) from and against all liabilities, obligations, claims, judgments, damages, penalties, fines, assessments, losses, indemnities, contributions, causes of action, costs and expenses (whether including, without limitation, the fees and expenses of attorneys, auditors and consultants) imposed upon or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based the Indemnitees on or arising out account of (Aa) the execution, delivery and performance any failure of the Operative Documents Borrower or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance any Subsidiary or rejection any employee or agent of any thereof to comply with any of the Airframe terms, covenants, obligations or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out prohibitions of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust this Agreement or any similar interest on or prior to other Financing Document (as defined in the Delivery Date Intercreditor Agreement), (including b) any violation of securities laws or ERISA); or (E) the offer or sale breach of any interest in the Equipment Notes representation or the Pass Through Certificates (or other evidence warranty of the debt relating Borrower or any Subsidiary set forth in this Agreement or in any other Financing Document or any certificate delivered by the Borrower or any Subsidiary pursuant hereto or thereto, or any claim that any statement, representation or warranty of the Borrower or any Subsidiary in any of the foregoing documents contains or contained any untrue or misleading statement of material fact or omits or omitted to state any material facts necessary to make the Aircraftstatements made therein not misleading in light of the circumstances under which they were made, (c) on the Delivery Date any action, suit, claim, proceeding or investigation of a judicial, legislative, administrative or regulatory nature arising from or in connection with a refinancing in accordance with the terms hereof Collateral, including without limitation (including 1) the presence, escape, seepage, leakage, discharge, emission, release, removal or threatened release, or disposal of any Hazardous Materials and (2) any violation of securities laws any law, ordinance or ERISA); providedgovernmental rules or regulations including without limitation any Environmental Law, (d) any suit, action, administrative proceeding, enforcement action, or governmental or private action of any kind whatsoever commenced against the Borrower, any Subsidiary or any Indemnitee which might adversely affect the validity or enforceability of this Agreement or any other Financing Document or the performance by the Borrower or any Subsidiary of any of its obligations hereunder or thereunder or (e) any loss or damage to property or any injury to or death of any Person that the foregoing indemnity shall not extend to an Indemnitee with respect may be occasioned by any cause whatsoever pertaining to any Expense to Collateral or the extent such Expense is attributable to one or more of use thereof, and shall further indemnify and save harmless the following: Indemnitees from and against (1) all amounts paid in settlement of any representation litigation commenced or warranty by such reasonably threatened against any Indemnitee in that falls within the Operative Documents or the Pass Through Documents being incorrectscope of clauses (a) through (e) above, or and (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) all expenses reasonably incurred in the case investigation of, preparation for or defense of any Indemniteelitigation, the offer, sale proceeding or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case investigation of any Indemnitee, nature whatsoever that falls within the offer, sale or other disposition by such Indemnitee scope of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents clauses (a) are not through (e) above, commenced or were not requested by Lessee or (b) are not occasioned by a specific requirement of reasonably threatened against the Operative DocumentsBorrower, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document Subsidiary or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 2 contracts

Samples: Credit Agreement and Waiver (Modine Manufacturing Co), Credit Agreement (Modine Manufacturing Co)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Lessee Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements (including reasonable legal fees and expenses but excluding internal costs and expenses such as salaries and overhead), of whatsoever kind and nature (collectively called “Expenses”) imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or the Pass Through Lessee Documents and or any of the transactions contemplated thereby; thereby or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof, (B) the manufacture, purchase, acceptance or rejection of any Aircraft, Airframe, airframe, the Airframe Engine or any Engine or Parts; Part, (C) the Aircraft any Aircraft, Airframe or airframe (or any portion of any thereof) or any engine installed on the Airframe Engine or any airframe on which an Engine is installed Part whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspection, leasestorage, sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of any Aircraft, Airframe, airframe (or any portion of any thereof) or the Aircraft Engine or any Part) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability liability, any damage to property or the environment, death of or injury to any person and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is resulting from or arising out of or attributable to one or more of the following: (1A) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents applicable to it including, without limitation, with respect to the creation or existence of a Lessor Lien (including for this purpose Liens which would be Lessor Liens but for the Pass Through Documentsproviso in the definition of Lessor Liens) attributable to it (except to the extent such failure was caused by the failure of Lessee to perform any obligation under a Lessee Document), or (3C) the willful misconduct or the gross negligence of such Indemnitee, or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's ’s interest in the Engine or in the Operative DocumentsDocuments other than during the continuance of a Default or an Event of Default under the Lease, or (5E) except to the extent relating to the payment of any Expenses on an After-Tax Basis, any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b29(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)hereof, or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11F) except to the extent fairly attributable to acts, omissions or events occurring prior thereto, acts or events occurring during which occur with respect to the Term Engine or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring any Part after the earlier of: (I) the return of physical possession of the Aircraft Engine or such Part to the Owner Trustee or its designee Lessor pursuant to the terms of the Lease Lease. Lessee further agrees to indemnify Lessor against, and agrees to protect, defend, save and keep harmless Lessor from (whether or not the transactions contemplated herein or in any of the other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15Lessee Documents are consummated), (II) the termination of the Term in accordance with Section 9 of the Leaseany and all liabilities, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documentsobligations, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses payable and disbursements of whatsoever kind and nature imposed on, incurred by or asserted against Lessor pursuant to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts indemnification obligations of Lessor under any agreement with any other person relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States Engine or any Aircraft or Airframe on which it is installed. Lessee further agrees that any payment or indemnity pursuant to this Section 29(c) in respect of any Expenses or other act amounts payable by Lessee pursuant to this Section 29(c) shall be paid on an After-Tax Basis. If, by reason of any Expense payment made to or omission for the account of an Indemnitee by Lessee pursuant to this Section 29(c), such Indemnitee subsequently realizes a tax deduction or credit or any reduction in Taxes not previously taken into account in computing such payment, such Indemnitee shall promptly pay to Lessee, but only if Lessee shall have made all payments then due and owing to such Indemnitee under the Owner TrusteeLessee Documents, an amount equal to the Owner Participant or sum of (I) the actual reduction in Taxes realized by such Indemnitee, or (15) any amounts Indemnitee which is attributable to any Lien which such Indemnitee is required to remove pursuant to deduction or credit, and (II) the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases actual reduction in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits Taxes realized by such Indemnitee as a result of any payment made by such Indemnitee pursuant to this sentence; provided, however, that no Indemnitee shall be obligated to make any payment pursuant to this sentence to the accrual or payment of such Expense shall equal extent that the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of would exceed (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the aggregate amount of all prior payments pursuant to this Section 6(c) by Lessee to such Indemnitee under this Section 29(c) less (less any ii) the aggregate amount of all prior payments previously made with respect to such Tax by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excesssentence, with any excess being carried forward to offset Lessee’s obligations, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make subsequent payments to such Indemnitee pursuant to under this Section 6(c)29(c). Nothing in this Section 6(c29(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the AircraftEngine. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to LesseeLessee and Lessor; provided that the failure to give provide such notice shall not affect the release Lessee from any of its obligations to indemnify hereunder, and no payment by Lessee to an Indemnitee pursuant to this Section 29(c) shall be deemed to constitute a waiver or release of any right or remedy which Lessee hereunder except to the extent Lessee is prejudiced by may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give Lessee such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as Lessee has agreed in a writing acceptable to such Indemnitee that Lessee is liable to such Indemnitee for such Expense hereunder, in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as Lessee has agreed in a writing acceptable to such Indemnitee that Lessee is liable to such Indemnitee for such Expense hereunder, in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best reasonable efforts to obtain such severance, provided that Lessee has requested such severance and agrees to pay the reasonable out-of-pocket costs and expenses (including, without limitation, reasonable counsel fees and disbursements) incurred by such Indemnitee, if any, in connection with such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while a Default or an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Engine or on any Aircraft, Airframe or airframe on which the Trust EstateEngine is installed, or (O) if such proceeding could in the Trust Indenture Estate good faith opinion of such Indemnitee entail any risk of civil liability or any part thereof unless in such an event Lessee shall have posted criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c29(c). Such Unless a Default or an Event of Default shall have occurred and be continuing (in which case the consent of Lessee shall not be required), such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c29(c). The Lessee shall supply the affected Indemnitee and Lessor with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c29(c). Upon payment in full of any Expense or Tax pursuant to this Section 6(c)29, Lessee, or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating thereto; provided that Lessee shall not be so subrogated so long as a Default or an Event of Default has occurred and is continuing. The Such Indemnitee agrees to give such further reasonable assurances or agreements and to cooperate with provide such reasonable cooperation to Lessee or the insurers to permit Lessee or the insurers to pursue such claims, if any, to the extent reasonably requested by LesseeLessee or the insurers. If In the event that Lessee shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 29(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to Lessee an amount equal to the amount of such reimbursement (but in no event more than such payment from Lessee) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this sentence; provided, that Lessor shall not be obligated to make any payment pursuant to this Section 6(c)29(c) over to Lessee. To the extent permitted that the amount of such payment would exceed (i) the aggregate amount of all prior payments by applicable law, interest at Lessee to Lessor under this Section 29(c) less (ii) the Base Rate plus one percent (1.0%) shall be paid, on demand, on any aggregate amount or indemnity not paid when due of all prior payments by Lessor to Lessee pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable 29(c), with any excess being carried forward to Lessee by any Person pursuant offset Lessee’s obligations, if any, to make subsequent payments to Lessor under this Section 6 29(c); provided, further, that such Indemnitee shall not be paid have no obligation to reimburse Lessee if (i) a Lease Default or an Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default Airline Services Agreement shall have occurred and be continuing, been terminated or canceled or shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied have terminated in accordance with its terms or (ii) Lessee has not paid such Indemnitee all amounts required pursuant to this Section 29(c) and any other amounts then due to such Indemnitee from Lessee under any of the immediately preceding sentenceOperative Documents or Lessee Documents. Lessee’s obligations under the indemnities provided for in this Lease shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other document or instrument, and the Person seeking indemnification from Lessee pursuant to any provision of this Lease may proceed directly against Lessee without first seeking to enforce any other right of indemnification.

Appears in 1 contract

Samples: Engine Lease Agreement (Pinnacle Airlines Corp)

General Indemnity. Lessee Sublessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Sublessee Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements (including reasonable legal fees and expenses but excluding internal costs and expenses such as salaries and overhead), of whatsoever kind and nature (collectively called “Expenses”) imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or the Pass Through Sublessee Documents and or any of the transactions contemplated thereby; thereby or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof, (B) the manufacture, purchase, acceptance or rejection of the Aircraft, Airframe or any Engine or Parts; Part, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspection, leasestorage, sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine or Part affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability liability, any damage to property or the environment, death of or injury to any person and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is resulting from or arising out of or attributable to one or more of the following: (1A) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents applicable to it including, without limitation, with respect to the creation or existence of a Sublessor Lien (including for this purpose Liens which would be Sublessor Liens but for the Pass Through Documentsproviso in the definition of Sublessor Liens) attributable to it (except to the extent such failure was caused by the failure of Sublessee to perform any obligation under a Sublessee Document), or (3C) the willful misconduct or the gross negligence of such Indemnitee, or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's ’s interest in the Airframe, any Engine or in the Operative DocumentsDocuments other than during the continuance of a Default or an Event of Default under the Sublease, or (5E) except to the extent relating to the payment of any Expenses on an After-Tax Basis, any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee Sublessee is required to indemnify for such Tax pursuant to Section 6(b29(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)hereof, or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11F) except to the extent fairly attributable to acts, omissions or events occurring prior thereto, acts or events occurring during which occur with respect to the Term Airframe or actions taken (any Engine or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring Part after the earlier of: (I) the return of physical possession of the Aircraft Airframe or such Engine or Part to the Owner Trustee or its designee Sublessor pursuant to the terms of the Lease Sublease. Sublessee further agrees to indemnify Sublessor against, and agrees to protect, defend, save and keep harmless Sublessor from (whether or not the transactions contemplated herein or in any of the other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15Sublessee Documents are consummated), (II) the termination of the Term in accordance with Section 9 of the Leaseany and all liabilities, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documentsobligations, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses payable to third parties do not constitute "ordinary and usual operating disbursements of whatsoever kind and overhead expenses")nature imposed on, incurred by or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove asserted against Sublessor pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(17(c) of the CodeParticipation Agreement. Sublessee further agrees that any payment or indemnity pursuant to this Section 29(c) in respect of any Expenses or other amounts payable by Sublessee pursuant to this Section 29(c) shall be paid on an After-Tax Basis. If, occurring with respect by reason of any Expense payment made to or for the account of an Indemnitee by Sublessee pursuant to this Section 29(c), such Indemnitee subsequently realizes a tax deduction or credit or any reduction in Taxes not previously taken into account in computing A1-55 such payment, such Indemnitee shall promptly pay to Sublessee, but only if Sublessee shall have made all payments then due and owing to such Indemnitee under the Sublessee Documents, an amount equal to the purchase sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or holding of any Pass Through Certificate credit, and (iII) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than actual reduction in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits Taxes realized by such Indemnitee as a result of any payment made by such Indemnitee pursuant to this sentence; provided, however, that no Indemnitee shall be obligated to make any payment pursuant to this sentence to the accrual or payment of such Expense shall equal extent that the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of would exceed (i) the aggregate amount of all prior payments by Sublessee to such tax savings, plus any additional tax savings recognized as Indemnitee under this Section 29(c) less (ii) the result aggregate amount of any payment made all prior payments with respect to such Tax by such Indemnitee to Sublessee pursuant to this sentence, when, as if, and with any excess being carried forward to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excessoffset Sublessee’s obligations, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make subsequent payments to such Indemnitee pursuant to under this Section 6(c)29(c). Nothing in this Section 6(c29(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or Sublessee of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to LesseeSublessee and Sublessor; provided that the failure to give provide such notice shall not affect the release Sublessee from any of its obligations to indemnify hereunder, and no payment by Sublessee to an Indemnitee pursuant to this Section 29(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to the extent Lessee is prejudiced by any right or remedy which Sublessee may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give Sublessee such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee Sublessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as Sublessee has agreed in a writing acceptable to such Indemnitee that Sublessee is liable to such Indemnitee for such Expense hereunder, in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as Sublessee has agreed in a writing acceptable to such Indemnitee that Sublessee is liable to such Indemnitee for such Expense hereunder, in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best reasonable efforts to obtain such severance, provided that Sublessee has requested such severance and agrees to pay the reasonable out-of-pocket costs and expenses (including, without limitation, reasonable counsel fees and disbursements) incurred by such Indemnitee, if any, in connection with such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee Sublessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while a Default or an Event of Default or an Event of Default (as such term is defined in the Head Lease) or a Default (as such term is defined in the Head Lease) of the type referred to in Section 14(a), 14(b) or 14(e) of the Head Lease shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate or the Trust Estate or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any risk of civil liability or criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee Sublessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee Sublessee with such information reasonably requested by Lessee Sublessee as is necessary or advisable for Lessee Sublessee to control or participate in any proceeding to the extent permitted by this Section 6(c29(c). Such Unless a Default or an Event of Default shall have occurred and be continuing (in which case the consent of Sublessee shall not be required), such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of LesseeSublessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c29(c). The Lessee Sublessee shall supply the affected Indemnitee and Sublessor with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c29(c). Upon payment in full of any Expense or Tax pursuant to this Section 6(c)29, LesseeSublessee, or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating thereto; provided that Sublessee shall not be so subrogated so long as a Default or an Event of Default has occurred and is continuing. The Such Indemnitee agrees to give such further reasonable assurances or agreements and to cooperate with Lessee provide such reasonable cooperation to Sublessee or the insurers to permit Lessee Sublessee or the insurers to pursue such claims, if any, to the extent reasonably requested by LesseeSublessee or the insurers. If In the event that Sublessee shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 29(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to Sublessee an amount equal to the amount of such reimbursement (but in no event more than such payment from Sublessee) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this sentence; provided, that Sublessor shall not be obligated to make any payment pursuant to this Section 6(c)29(c) over to Lessee. To the extent permitted that the amount of such payment would exceed (i) the aggregate amount of all prior payments by applicable law, interest at Sublessee to Sublessor under this Section 29(c) less (ii) the Base Rate plus one percent (1.0%) shall be paid, on demand, on any aggregate amount or indemnity not paid when due of all prior payments by Sublessor to Sublessee pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable 29(c), with any excess being carried forward to Lessee by any Person pursuant offset Sublessee’s obligations, if any, to make subsequent payments to Sublessor under this Section 6 29(c); provided, further, that such Indemnitee shall not be paid have no obligation to Lessee reimburse Sublessee if (i) a Lease Default or an Event of Default or an Event of Default (as such term is defined in the Head Lease) has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default Airline Services Agreement shall have occurred and be continuing, been terminated or canceled or shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied have terminated in accordance with its terms or (ii) Sublessee has not paid such Indemnitee all amounts required pursuant to this Section 29(c) and any other amounts then due to such Indemnitee from Sublessee under any of the immediately preceding sentenceOperative Documents or Sublessee Documents. Sublessee’s obligations under the indemnities provided for in this Sublease shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other document or instrument, and the Person seeking indemnification from Sublessee pursuant to any provision of this Sublease may proceed directly against Sublessee without first seeking to enforce any other right of indemnification.

Appears in 1 contract

Samples: Sublease Agreement (Mair Holdings Inc)

General Indemnity. Lessee The Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements, of whatsoever kind and nature (collectively called "Expenses") imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any lease or sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Liquidity Provider, the Intercreditor Agreement and the transactions contemplated thereby; Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; infringement or (D) the offer offer, sale or sale delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any interest in person who controls an Indemnitee within the Trust Estate or meaning of Section 15 of the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation Securities Act of securities laws or ERISA1933, as amended); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the any Pass Through Documents Trust Agreement or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the any Pass Through DocumentsTrust Agreement applicable to it including, without limitation, the creation or existence of a Loan Participant Lien or an Indenture Trustee's Lien (except to the extent such failure was caused directly by the failure of the Owner to perform any obligation under an Owner Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its such Indemnitee' s interest in the Airframe or Airframe, any Engine (or in the Operative Documents other than during the continuance of a Lease an Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of under the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTrust Indenture, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee the Owner is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and provides for the Tax Indemnity Agreement exclusively provide for LesseeOwner's liability with respect to Taxes), or (6F) in the case of the Owner an Indemnitee which is a Loan Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate a Certificate Holder or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or Indenture Trustee (7) in the case of the Owner Trustee in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Indenture Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10G) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsDocuments, supplementsthe Intercreditor Agreement, waivers any of the Liquidity Facilities or consents (a) are not any Pass Through Trust Agreement other than such as have been consented to, approved, authorized or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsOwner, or (11H) except subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not the Owner is required to indemnify therefor pursuant to this Agreement, or (I) any Expense which is specified to be for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under any Operative Document, or (J) as to any Indemnitee the funding of such Indemnitee's participation in the transaction contemplated by the Operative Documents giving rise to a "prohibited transaction" within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA, or (K) to the extent fairly attributable to acts the offer, sale or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return delivery of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease debt securities (other than pursuant any Secured Certificates or Pass Through Certificates) by the owner of the Pass Through Certificates issued by the Class B Pass Through Trust, or (L) to and the extent attributable to the offer or sale by such Indemnitee (or any member of the Related Indemnitee Group) of any interest in accordance with Section 15 thereofthe Aircraft, the Secured Certificates, the Pass Through Certificates, or any similar interest, in violation of the Securities Act of 1933, as amended, or other applicable federal, state or foreign securities Laws (other than any thereof caused by acts or omissions of the Owner or any of its Affiliates). The foregoing indemnity shall not extend to any Expense to the extent that such Expense is not caused by, or does not arise out of, an act, omission or event which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled occurs prior to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 Lien of the Lease, (III) Trust Indenture and the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Owner under the Operative Documents. The Owner further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the account of an Indemnitee by the Owner Trusteepursuant to this Section 7(c), such Indemnitee subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to the Owner, but only if the Owner Participant or such Indemnitee, or (15) any amounts attributable shall have made all payments then due and owing to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraftsentence. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to Lesseethe Owner; provided that the failure to give provide such notice shall not affect release the Owner from any of its obligations to indemnify hereunder, and no payment by the Owner to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to any right or remedy which the extent Lessee is prejudiced by Owner may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give the Owner such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee the Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate Collateral or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee the Owner with such information reasonably requested by Lessee the Owner as is necessary or advisable for Lessee the Owner to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee Owner shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When the Owner or the insurers under a policy of insurance maintained by the Owner (or any Lessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of the Owner or such insurers, provided that no such defense shall be compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee's prior consent. In the case of any Expense indemnified by the Owner hereunder which is covered by a policy of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, Lesseethe Owner or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 of the Trust Indenture. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Owner or the insurers to permit Lessee the Owner or the insurers to pursue such claims, if any, to the extent reasonably requested by Lesseethe Owner or the insurers. If In the event that the Owner shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to the Owner an amount equal to the amount of such reimbursement (but in no event more than such payment from the Owner) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, provided that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse the Owner if the Owner has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from the Owner under any of the Operative Documents. The Owner's obligations under the Lease indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other Operative Documentdocument or instrument, and the Person seeking indemnification from the Owner pursuant to any provision of this Agreement may proceed directly against the Owner without first seeking to enforce any other right of indemnification. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount D. W-8 BEN of CDC Finance—CDC IXIS 86 E. Letter from LMA to such Person) andNWA re Exhibits E and G of Note Purchase Agreement 87 F. Letter from Elektra to NWA re Exhibits F and H of Note Purchase Agreement 88 KEY NWA Northwest Airlines, if a Lease Event Inc. ST&B Xxxxxxx Xxxxxxx & Xxxxxxxx CWT Cadwalader Xxxxxxxxxx & Xxxx XX Crédit Lyonnais S&S Shearman & Sterling XX Xxxxxx Price Xxxxxxx & Kammholz XX Xxxxxxxx Chance BD Xxxxxxx Xxxx LLP WFBN Xxxxx Fargo Bank Northwest, National Association RQN Xxx Xxxxxxx & Xxxxxxx XX Xxxxx & Xxxxx SSB State Street Bank and Trust Company WFW Xxxxxx Xxxxxx & Xxxxxxxx CDC Caisse des Depots ct Consignations CDCFP CDC Financial Products Inc. CDC-IXIS CDC Finance—CDC IXIS SSC State Street Bank and Trust Company of Default shall have occurred and be continuingConnecticut, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee)National Association LMA Liquidités de Marché S.A. Elektra Elektra Purchase No. At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.1 Ltd. QuickLinks Exhibit 99.30

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Inc /Mn)

General Indemnity. Lessee The Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements, of whatsoever kind and nature (collectively called "Expenses") imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any lease or sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Primary Liquidity Provider, the Intercreditor Agreement and the transactions contemplated thereby; Primary Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; infringement or (D) the offer offer, sale or sale delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any interest in person who controls an Indemnitee within the Trust Estate or meaning of Section 15 of the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation Securities Act of securities laws or ERISA1933, as amended); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Primary Liquidity Facilities, the Policy Provider Agreement or the any Pass Through Documents Trust Agreement or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Primary Liquidity Facilities, the Policy Provider Agreement or the any Pass Through DocumentsTrust Agreement applicable to it including, without limitation, the creation or existence of a Loan Participant Lien or an Indenture Trustee's Lien (except to the extent such failure was caused directly by the failure of the Owner to perform any obligation under an Owner Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its such Indemnitee's interest in the Airframe or Airframe, any Engine (or in the Operative Documents other than during the continuance of a Lease an Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of under the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTrust Indenture, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee the Owner is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and provides for the Tax Indemnity Agreement exclusively provide for LesseeEXHIBIT L-1 Owner's liability with respect to Taxes), or (6F) in the case of the Owner an Indemnitee which is a Loan Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate a Certificate Holder or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or Indenture Trustee (7) in the case of the Owner Trustee in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Indenture Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10G) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsDocuments, supplementsthe Intercreditor Agreement, waivers either of the Primary Liquidity Facilities or consents (a) are not any Pass Through Trust Agreement other than such as have been consented to, approved, authorized or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsOwner, or (11H) except subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not the Owner is required to indemnify therefor pursuant to this Agreement, or (I) any Expense which is specified to be for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under any Operative Document, (J) as to any Indemnitee the funding of such Indemnitee's participation in the transaction contemplated by the Operative Documents giving rise to a "prohibited transaction" within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA of (K) to the extent fairly attributable to acts the offer or events occurring during the Term or actions taken sale by such Indemnitee (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession any member of the Aircraft to Related Indemnitee Group) of any interest in the Owner Trustee Aircraft, the Secured Certificates, the Pass Through Certificates, or its designee pursuant to the terms any similar interest, in violation of the Lease Securities Act of 1933, as amended, or other applicable federal, state or foreign securities Laws (other than pursuant any thereof caused by acts or omissions of the Owner or any of its Affiliates). The foregoing indemnity shall not extend to and in accordance with Section 15 thereofany Expense to the extent that such Expense is not caused by, in or does not arise out of, an act, omission or event which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled occurs prior to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 Lien of the Lease, (III) Trust Indenture and the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Owner under the Operative Documents. The Owner further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the account of an Indemnitee by the Owner Trusteepursuant to this Section 7(c), such Indemnitee subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to the Owner, but only if the Owner Participant or such Indemnitee, or (15) any amounts attributable shall have made all payments then due and owing to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraftsentence. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, EXHIBIT L-2 give notice of such claim to Lesseethe Owner; provided that the failure to give provide such notice shall not affect release the Owner from any of its obligations to indemnify hereunder, and no payment by the Owner to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to any right or remedy which the extent Lessee is prejudiced by Owner may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give the Owner such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee the Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate Collateral or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee the Owner with such information reasonably requested by Lessee the Owner as is necessary or advisable for Lessee the Owner to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee Owner shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When the Owner or the insurers under a policy of insurance maintained by the Owner (or any Lessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of the Owner or such insurers, provided that no such defense shall be EXHIBIT L-3 compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee's prior consent. In the case of any Expense indemnified by the Owner hereunder which is covered by a policy of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, Lesseethe Owner or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 of the Trust Indenture. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Owner or the insurers to permit Lessee the Owner or the insurers to pursue such claims, if any, to the extent reasonably requested by Lesseethe Owner or the insurers. If In the event that the Owner shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to the Owner an amount equal to the amount of such reimbursement (but in no event more than such payment from the Owner) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, provided that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse the Owner if the Owner has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from the Owner under any of the Operative Documents. The Owner's obligations under the Lease indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other Operative Document. Any such amount shall be held by such document or instrument, and the Person (seeking indemnification from the Lessee hereby granting a security interest in such amount Owner pursuant to such Person) and, if a Lease Event any provision of Default shall have occurred and be continuing, shall be applied this Agreement may proceed directly against Lessee's obligations hereunder the Owner without first seeking to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing enforce any such Lease Event other right of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceindemnification.

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Inc /Mn)

General Indemnity. Lessee The Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements, of whatsoever kind and nature (collectively called “Expenses”) imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any lease or sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Liquidity Provider, the Intercreditor Agreement and the transactions contemplated thereby; Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; infringement or (D) the offer offer, sale or sale delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any interest in person who controls an Indemnitee within the Trust Estate or meaning of Section 15 of the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation Securities Act of securities laws or ERISA1933, as amended); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the any Pass Through Documents Trust Agreement or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the any Pass Through DocumentsTrust Agreement applicable to it including, without limitation, the creation or existence of a Loan Participant Lien or an Indenture Trustee’s Lien (except to the extent such failure was caused directly by the failure of the Owner to perform any obligation under an Owner Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its such Indemnitee’s interest in the Airframe or Airframe, any Engine (or in the Operative Documents other than during the continuance of a Lease an Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of under the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTrust Indenture, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee the Owner is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and provides for the Tax Indemnity Agreement exclusively provide for Lessee's Owner’s liability with respect to Taxes), or (6F) in the case of the Owner an Indemnitee which is a Loan Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate a Certificate Holder or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or Indenture Trustee (7) in the case of the Owner Trustee in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Indenture Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10G) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsDocuments, supplementsthe Intercreditor Agreement, waivers any of the Liquidity Facilities or consents (a) are not any Pass Through Trust Agreement other than such as have been consented to, approved, authorized or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsOwner, or (11H) except subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not the Owner is required to indemnify therefor pursuant to this Agreement, or (I) any Expense which is specified to be for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under any Operative Document, or (J) as to any Indemnitee the funding of such Indemnitee’s participation in the transaction contemplated by the Operative Documents giving rise to a “prohibited transaction” within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA. The foregoing indemnity shall not extend to any Expense to the extent fairly attributable that such Expense is not caused by, or does not arise out of, an act, omission or event which occurs prior to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 Lien of the Lease, (III) Trust Indenture and the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Owner under the Operative Documents. The Owner further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the account of an Indemnitee by the Owner Trusteepursuant to this Section 7(c), such Indemnitee subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to the Owner, but only if the Owner Participant or such Indemnitee, or (15) any amounts attributable shall have made all payments then due and owing to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraftsentence. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to Lesseethe Owner; provided that the failure to give provide such notice shall not affect release the Owner from any of its obligations to indemnify hereunder, and no payment by the Owner to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to any right or remedy which the extent Lessee is prejudiced by Owner may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give the Owner such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee the Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate Collateral or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee the Owner with such information reasonably requested by Lessee the Owner as is necessary or advisable for Lessee the Owner to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee Owner shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When the Owner or the insurers under a policy of insurance maintained by the Owner (or any Lessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of the Owner or such insurers, provided that no such defense shall be compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee’s prior consent. In the case of any Expense indemnified by the Owner hereunder which is covered by a policy of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, Lesseethe Owner or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 of the Trust Indenture. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Owner or the insurers to permit Lessee the Owner or the insurers to pursue such claims, if any, to the extent reasonably requested by Lesseethe Owner or the insurers. If In the event that the Owner shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to the Owner an amount equal to the amount of such reimbursement (but in no event more than such payment from the Owner) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, provided that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse the Owner if the Owner has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from the Owner under any of the Operative Documents. The Owner’s obligations under the Lease indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other Operative Document. Any such amount shall be held by such document or instrument, and the Person (seeking indemnification from the Lessee hereby granting a security interest in such amount Owner pursuant to such Person) and, if a Lease Event any provision of Default shall have occurred and be continuing, shall be applied this Agreement may proceed directly against Lessee's obligations hereunder the Owner without first seeking to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing enforce any such Lease Event other right of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceindemnification.

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Corp)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee againstpay, and agrees on demand to protectindemnify and hold harmless, save Lessor and keep harmless each of them from Participant, and their respective officers, directors, employees, servants, agents, shareholders, affiliates, successors, assigns and transferees (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummatedindividually, an "Indemnitee"), from and against any and all Expenses imposed onclaims, incurred by or asserted against any Indemniteedamages, in any way relating losses, liabilities (including, but not limited to, any claim or liability for strict liability in tort or otherwise, including, without limitation, liability arising under any applicable environment, noise or pollution control statute, rule or regulation), demands, suits, judgments, causes of action and all legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and any costs and expenses incurred in connection therewith, including attorney's fees, which may directly or indirectly result from, relate to or arise out of the Purchase Agreement (excluding, for the avoidance of doubt, claims by Manufacturer: (i) for a breach of the Purchase Agreement prior to the delivery of the Aircraft thereunder, (ii) based on or arising out of (A) the execution, delivery and performance provisions of the Operative Documents Purchase Agreement that have been redacted from the copy of the Purchase Agreement provided to Lessee, and (iii) for payment of the purchase price of the Aircraft) or this Lease or the Pass Through Documents and the transactions contemplated thereby; (B) the condition, ownership, manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturetest flight, purchase, registration, reregistration, financing, refinancing, ownershipinspection, delivery, nondelivery, inspectionacceptance, nonacceptance, rejection, import, export, registration, lease, sublease, possession, control, storage, return, transportation, disposition, use or non-useoperation of any Item of Equipment (except as to an Indemnitee for claims that are the result of the gross negligence or willful misconduct of such Indemnitee), operationor which may be caused by any malfunction or defect in any Item of Equipment, latent or otherwise, arising from the material or any article used therein or from the design, testing or use thereof or from any maintenance, service, repair, overhaul, modificationimprovement, alterationmodification or alteration thereof, conditionincluding any modification made pursuant to Article 2(h) hereof, replacement, repair, substitution, sale, return or other disposition regardless of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defectswhen such defect shall be discovered, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) such Item of Equipment is at the offer or sale of any interest time in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to Lessee and in accordance with Section 15 thereof, in which case wherever located. Without limiting Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15Article 8(a), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly hereby agrees to pay under indemnify, reimburse and hold the Indemnitees harmless from any Operative Document or and all liability, claims, demands, costs, charges and expenses, including royalty payments and counsel fees, in any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documentsmanner, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made accruing against an Indemnitee involving one because of the manufacture, use or more Expenses and such Indemnitee has notice thereofoperation of any Item of Equipment or any design, such Indemnitee shall promptly after receiving such notice give notice article or material therein or relating thereto, whether because of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations infringement of Lessee hereunder except to the extent Lessee is prejudiced by such failure patent or the Lesseeany other right. At Lessor's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuingrequest, Lessee shall be entitledassume and conduct promptly and diligently, at its sole cost and expense, acting through counsel reasonably acceptable the entire defense of the Indemnitees against any such claim, and any claim, demand, suit or action for which an Indemnitee as a buyer is required to assume liability, whether for patent infringement or otherwise, under the Purchase Agreement. Notwithstanding anything to the respective Indemniteecontrary contained in this Article 8(a), the indemnification provided for in this Article 8(a) shall only apply to events or circumstances which either (Ai) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated occur prior to the transactions contemplated by the Operative Documents, to assume responsibility for expiration or sooner termination of this Lease and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any return of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee Aircraft pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested terms hereof, regardless of when asserted, or (ii) are caused by Lessee as is necessary or advisable for Lessee 8-1 attributable to control acts or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent omissions of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable lawofficers, interest at the Base Rate plus one percent (1.0%) shall be paiddirectors, on demandemployees, on any amount servants, agents, contractors or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceaffiliates.

Appears in 1 contract

Samples: Lease Agreement (Turn Works Acquisition Iii Sub a Inc)

General Indemnity. Subject to the other provisions of this Section 10.3, Lessee hereby agrees to pay, defend and indemnify and hold Lessor, Trust Company, Lenders, the Administrative Agent, Collateral Agent and Certificate Holders and their respective Affiliates, successors and assigns (including any consolidated or combined group of which any such Person is a member) (each Indemnitee against, and agrees to protect, save and keep a "Tax Indemnitee") harmless each of them on an After-Tax Basis from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses Federal, state, local and foreign taxes, fees, withholdings, levies, imposts, duties, assessments, penalties and charges of any kind and nature whatsoever, together with any penalties, fines or interest thereon (herein called "Taxes") howsoever imposed, whether levied or imposed on, incurred by upon or asserted against any a Tax Indemnitee, Lessee, any Item of Equipment, or any part thereof, by any federal, state or local government or taxing authority in the United States, or by any way relating totaxing authority of a foreign country or subdivision thereof, based on upon or arising out of with respect to (Aa) the executionItems of Equipment, delivery and performance any Item of the Operative Documents Equipment or the Pass Through Documents and the transactions contemplated thereby; any part thereof, (Bb) the manufacture, purchaseconstruction, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufactureordering, purchase, registration, reregistration, financing, refinancingtransfer, ownership, transfer of ownership, titling or re-titling, registration or re-registration, delivery, nondeliveryleasing, inspection, lease, subleasesubleasing, possession, storage, use or non-use, operation, maintenance, overhaulstorage, modificationremoval, alterationreturn, conditionmortgaging, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale granting of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation in, transfers of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); providedtitle to, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offeracquisition, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9licensing, 10documentation, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offerrepossession, sale or other acquisition or disposition (voluntary or involuntary) by such Note Holder of all the Items of Equipment, any Item of Equipment or any part thereof, (c) the revenues, rent, receipts or earnings arising from any Item of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in thereof, (d) any Operative Document, (e) any Lease Payment, Availability Fee or Supplemental Payment or any payment made to a Lender by Lessor, Lessee, Certificate Holders or Trust Company pursuant to the Operative Documents, or (5f) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with otherwise in respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document thereof or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, transaction or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial hereby or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentencethereby.

Appears in 1 contract

Samples: Participation Agreement (Universal Compression Holdings Inc)

General Indemnity. Lessee The Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements, of whatsoever kind and nature (collectively called "EXPENSES") imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any lease or sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Liquidity Provider, the Intercreditor Agreement and the transactions contemplated thereby; Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; infringement or (D) the offer offer, sale or sale delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any interest in person who controls an Indemnitee within the Trust Estate or meaning of Section 15 of the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation Securities Act of securities laws or ERISA1933, as amended); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, PROVIDED that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities, the Policy Provider Agreement or the Pass Through Documents Trust Agreements or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities, the Policy Provider Agreement or the Pass Through DocumentsTrust Agreements applicable to it including, without limitation, the creation or existence of a Loan Participant Lien or an Indenture Trustee's Lien (except to the extent such failure was caused directly by the failure of the Owner to perform any obligation under an Owner Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its such Indemnitee's interest in the Airframe or Airframe, any Engine (or in the Operative Documents other than during the continuance of a Lease an Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of under the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTrust Indenture, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee the Owner is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and provides for the Tax Indemnity Agreement exclusively provide for LesseeOwner's EXHIBIT L-1 liability with respect to Taxes), or (6F) in the case of the Owner an Indemnitee which is a Loan Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate a Certificate Holder or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or Indenture Trustee (7) in the case of the Owner Trustee in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Indenture Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10G) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsother than such as have been consented to, supplementsapproved, waivers authorized or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsOwner, or (11H) except subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not the Owner is required to indemnify therefor pursuant to this Agreement, or (I) any Expense which is specified to be for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under any Operative Document, or (J) as to any Indemnitee the funding of such Indemnitee's participation in the transaction contemplated by the Operative Documents giving rise to a "prohibited transaction" within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA. The foregoing indemnity shall not extend to any Expense to the extent fairly attributable that such Expense is not caused by, or does not arise out of, an act, omission or event which occurs prior to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 Lien of the Lease, (III) Trust Indenture and the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Owner under the Operative Documents. The Owner further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the account of an Indemnitee by the Owner Trusteepursuant to this Section 7(c), such Indemnitee subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to the Owner, but only if the Owner Participant or such Indemnitee, or (15) any amounts attributable shall have made all payments then due and owing to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraftsentence. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to Lesseethe Owner; provided PROVIDED that the failure to give provide such notice shall not affect release the Owner from any of its obligations to indemnify hereunder, and no payment by the Owner to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to any right or remedy which the extent Lessee is prejudiced by Owner may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give the Owner such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee the Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate Collateral or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee the Owner with such information reasonably requested by Lessee the Owner as is necessary or advisable for Lessee the Owner to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee Owner shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When the Owner or the insurers under a policy of insurance maintained by the Owner (or any Lessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of the Owner or such insurers, provided that no such defense shall be compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee's prior consent. In the case of any Expense indemnified by the Owner hereunder which is covered by a policy of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of EXHIBIT L-3 their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, Lesseethe Owner or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 of the Trust Indenture. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Owner or the insurers to permit Lessee the Owner or the insurers to pursue such claims, if any, to the extent reasonably requested by Lesseethe Owner or the insurers. If In the event that the Owner shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to the Owner an amount equal to the amount of such reimbursement (but in no event more than such payment from the Owner) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, PROVIDED that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse the Owner if the Owner has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from the Owner under any of the Operative Documents. The Owner's obligations under the Lease indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other Operative Document. Any such amount shall be held by such document or instrument, and the Person (seeking indemnification from the Lessee hereby granting a security interest in such amount Owner pursuant to such Person) and, if a Lease Event any provision of Default shall have occurred and be continuing, shall be applied this Agreement may proceed directly against Lessee's obligations hereunder the Owner without first seeking to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing enforce any such Lease Event other right of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceindemnification.

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Inc /Mn)

General Indemnity. Lessee The Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements, of whatsoever kind and nature (collectively called "Expenses") imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any lease or sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Liquidity Provider, the Intercreditor Agreement and the transactions contemplated thereby; Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; infringement or (D) the offer offer, sale or sale delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any interest in person who controls an Indemnitee within the Trust Estate or meaning of Section 15 of the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation Securities Act of securities laws or ERISA1933, as amended); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the Pass Through Documents Trust Agreements or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the Pass Through DocumentsTrust Agreements applicable to it including, without limitation, the creation or existence of a Loan Participant Lien or an Indenture Trustee's Lien (except to the extent such failure was caused directly by the failure of the Owner to perform any obligation under an Owner Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its such Indemnitee's interest in the Airframe or Airframe, any Engine (or in the Operative Documents other than during the continuance of a Lease an Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of under the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTrust Indenture, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee the Owner is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and provides for the Tax Indemnity Agreement exclusively provide for LesseeOwner's liability with respect to Taxes), or (6F) in the case of the Owner an Indemnitee which is a Loan EXHIBIT L-1 Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate a Certificate Holder or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or Indenture Trustee (7) in the case of the Owner Trustee in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Indenture Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10G) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsother than such as have been consented to, supplementsapproved, waivers authorized or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsOwner, or (11H) except subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not the Owner is required to indemnify therefor pursuant to this Agreement, or (I) any Expense which is specified to be for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under any Operative Document, or (J) as to any Indemnitee the funding of such Indemnitee's participation in the transaction contemplated by the Operative Documents giving rise to a "prohibited transaction" within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA. The foregoing indemnity shall not extend to any Expense to the extent fairly attributable that such Expense is not caused by, or does not arise out of, an act, omission or event which occurs prior to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 Lien of the Lease, (III) Trust Indenture and the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Owner under the Operative Documents. The Owner further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the account of an Indemnitee by the Owner Trusteepursuant to this Section 7(c), such Indemnitee subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to the Owner, but only if the Owner Participant or such Indemnitee, or (15) any amounts attributable shall have made all payments then due and owing to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraftsentence. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to Lesseethe Owner; provided that the failure to give provide such notice shall not affect release the Owner from any of its obligations to indemnify hereunder, and no payment by the Owner to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to any right or remedy which the extent Lessee is prejudiced by Owner may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give the Owner such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as the Owner has agreed in a writing acceptable to such Indemnitee that EXHIBIT L-2 the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee the Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate Collateral or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee the Owner with such information reasonably requested by Lessee the Owner as is necessary or advisable for Lessee the Owner to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee Owner shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When the Owner or the insurers under a policy of insurance maintained by the Owner (or any Lessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of the Owner or such insurers, provided that no such defense shall be compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee's prior consent. In the case of any Expense indemnified by the Owner hereunder which is covered by a policy of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the EXHIBIT L-3 benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, Lesseethe Owner or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 of the Trust Indenture. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Owner or the insurers to permit Lessee the Owner or the insurers to pursue such claims, if any, to the extent reasonably requested by Lesseethe Owner or the insurers. If In the event that the Owner shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to the Owner an amount equal to the amount of such reimbursement (but in no event more than such payment from the Owner) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, provided that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse the Owner if the Owner has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from the Owner under any of the Operative Documents. The Owner's obligations under the Lease indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other Operative Document. Any such amount shall be held by such document or instrument, and the Person (seeking indemnification from the Lessee hereby granting a security interest in such amount Owner pursuant to such Person) and, if a Lease Event any provision of Default shall have occurred and be continuing, shall be applied this Agreement may proceed directly against Lessee's obligations hereunder the Owner without first seeking to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing enforce any such Lease Event other right of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceindemnification.

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Holdings Corp/Pred)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee againstpay, and agrees on demand to protectindemnify and hold harmless, save Lessor and keep harmless each of them from Participant, and their respective officers, directors, employees, servants, agents, shareholders, affiliates, successors, assigns and transferees (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummatedindividually, an "Indemnitee"), from and against any and all Expenses imposed onclaims, incurred by or asserted against any Indemniteedamages, in any way relating losses, liabilities (including, but not limited to, any claim or liability for strict liability in tort or otherwise, including, without limitation, liability arising under any applicable environment, noise or pollution control statute, rule or regulation), demands, suits, judgments, causes of action and all legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and any costs and expenses incurred in connection therewith, including attorney's fees, which may directly or indirectly result from, relate to or arise out of the Purchase Agreement (excluding, for the avoidance of doubt, claims by Manufacturer: (i) for a breach of the Purchase Agreement prior to the delivery of the Aircraft thereunder, (ii) based on or arising out of (A) the execution, delivery and performance provisions of the Operative Documents Purchase Agreement that have been redacted from the copy of the Purchase Agreement provided to Lessee, and (iii) for payment of the purchase price of the Aircraft) or this Lease or the Pass Through Documents and the transactions contemplated thereby; (B) the condition, ownership, manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturetest flight, purchase, registration, reregistration, financing, refinancing, ownershipinspection, delivery, nondelivery, inspectionacceptance, nonacceptance, rejection, import, export, registration, lease, sublease, possession, control, storage, return, transportation, disposition, use or non-useoperation of any Item of Equipment (except as to an Indemnitee for claims that are the result of the gross negligence or willful misconduct of such Indemnitee), operationor which may be caused by any malfunction or defect in any Item of Equipment, latent or otherwise, arising from the material or any article used therein or from the design, testing or use thereof or from any maintenance, service, repair, overhaul, modificationimprovement, alterationmodification or alteration thereof, conditionincluding any modification made pursuant to Article 2(h) hereof, replacement, repair, substitution, sale, return or other disposition regardless of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defectswhen such defect shall be discovered, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) such Item of Equipment is at the offer or sale of any interest time in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to Lessee and in accordance with Section 15 thereof, in which case wherever located. Without limiting Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15Article 8(a), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly hereby agrees to pay under indemnify, reimburse and hold the Indemnitees harmless from any Operative Document or and all liability, claims, demands, costs, charges and expenses, including royalty payments and counsel fees, in any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documentsmanner, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made accruing against an Indemnitee involving one because of the manufacture, use or more Expenses and such Indemnitee has notice thereofoperation of any Item of Equipment or any design, such Indemnitee shall promptly after receiving such notice give notice article or material therein or relating thereto, whether because of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations infringement of Lessee hereunder except to the extent Lessee is prejudiced by such failure patent or the Lesseeany other right. At Lessor's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuingrequest, Lessee shall be entitledassume and conduct promptly and diligently, at its sole cost and expense, acting through counsel reasonably acceptable the entire defense of the Indemnitees against any such claim, and any claim, demand, suit or action for which an Indemnitee as a buyer is required to assume liability, whether for patent infringement or otherwise, under the Purchase Agreement. Notwithstanding anything to the respective Indemniteecontrary contained in this Article 8(a), the indemnification provided for in this Article 8(a) shall only apply to events or circumstances which either (Ai) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated occur prior to the transactions contemplated by the Operative Documents, to assume responsibility for expiration or sooner termination of this Lease and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any return of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee Aircraft pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested terms hereof, regardless of when asserted, or (ii) are caused by Lessee as is necessary or advisable for Lessee - 8-1 - attributable to control acts or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent omissions of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable lawofficers, interest at the Base Rate plus one percent (1.0%) shall be paiddirectors, on demandemployees, on any amount servants, agents, contractors or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceaffiliates.

Appears in 1 contract

Samples: Lease Agreement (Turn Works Acquisition Iii Sub a Inc)

General Indemnity. Lessee (i) Borrower hereby agrees to indemnify on an After-Tax Basis each Indemnitee against, and agrees to protect, save and keep hold harmless each of them Indemnitee from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of or which would not have occurred but for (A) the execution, delivery and performance of the Operative Documents or (including the Pass Through Documents enforcement thereof) and the consummation of the transactions contemplated therebythereby or any Default or Event of Default thereunder; (B) the manufacture, design, purchase, resale, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, design, installation, purchase, registration, reregistrationre-registration, refinancing, financing, refinancingmortgage, ownership, delivery, re-delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, storage, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer offer, sale or sale delivery of any interest in the Trust Estate or the Trust Agreement or any similar interest Notes on or prior to the Delivery Closing Date (including any violation of securities laws or ERISA); or (E) the offer or sale any violation of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt law relating to the Aircraft) on Aircraft or the Delivery Date or in connection with a refinancing in accordance with the terms hereof (transactions contemplated herein, including any violation of Federal or state securities laws laws, ERISA, or ERISA); providedFederal or state environmental laws. Notwithstanding the preceding sentence, that the foregoing indemnity agreement to indemnify, protect, save and hold harmless each any particular Indemnitee under this Section 6(c) shall not extend to an Indemnitee with respect to any Expense incurred by such Indemnitee to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1) any express representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, incorrect in any material respect; or (2) the failure by such Indemnitee to perform or observe in any of its agreementsmaterial respect any express agreement, covenants covenant or conditions condition in any of the Operative Documents or the Pass Through Documents, unless such failure by such Indemnitee results from any failure by Borrower to observe in any material respect any covenant, agreement or condition in any Operative Document; or (3) the willful misconduct or the gross negligence of such Indemnitee, Indemnitee (other than gross negligence imputed to such Indemnitee solely by reason of its interest in the Aircraft or being party to the Operative Documents); or (4) (A) in the case of any IndemniteeLender, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note (other than as contemplated by the Mortgage or (Cas directed by Borrower) or in the case of any other Indemnitee, the offer, sale or other a disposition by such Indemnitee of all or any part of such Indemnitee's ’s interest in any of the Operative Documents, other than, in each case, during the continuance of a Specified Default or an Event of Default; or (5) any Tax, or any loss of Tax (other than taxes benefits or increase in Tax liability under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) any Tax law, whether or not Lessee Borrower is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide provides for Lessee's Borrower’s liability with respect to Taxes); provided, however, that this clause (5) shall not apply to Taxes taken into consideration in making any payment under the Operative Documents on an After-Tax Basis; or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereofSecurity Trustee, a failure on the part of the Owner Security Trustee to distribute in accordance with the Trust Agreement Mortgage any amounts received and distributable by it thereunder, ; or (8) in 7) other than during the case continuation of the Indenture Trustee in its individual and trust capacitiesa Specified Default or an Event of Default, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (aA) are do not require or were not requested by Lessee receive the approval of Borrower or (bB) are not occasioned by a specific requirement of the Operative Documents, ; or (118) the offer, sale or delivery of a Note by such Indemnitee in violation of the Securities Act or a violation by such Indemnitee of any other applicable law or regulation relating to any transfer of a Note; or (9) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Termprior thereto, actions taken (or required to be taken and not taken) acts or events occurring which occur after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and payment in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee full of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Borrower’s obligations under the Operative Documents, ; or (1310) in the case of Security Trustee, any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA compensation as provided in Section 6.07 of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceMortgage.

Appears in 1 contract

Samples: Loan Agreement (Skywest Inc)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Lessee Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements (including reasonable legal fees and expenses but excluding internal costs and expenses such as salaries and overhead), of whatsoever kind and nature (collectively called “Expenses”) imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or the Pass Through Lessee Documents and or any of the transactions contemplated thereby; thereby or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof, (B) the manufacture, purchase, acceptance or rejection of any Aircraft, Airframe, airframe, the Airframe Engine or any Engine or Parts; Part, (C) the Aircraft any Aircraft, Airframe or airframe (or any portion of any thereof) or any engine installed on the Airframe Engine or any airframe on which an Engine is installed Part whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspection, leasestorage, sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of any Xxxxxxxx, Xxxxxxxx, airframe (or any portion of any thereof) or the Aircraft Engine or any Part) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability liability, any damage to property or the environment, death of or injury to any person and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is resulting from or arising out of or attributable to one or more of the following: (1A) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents applicable to it including, without limitation, with respect to the creation or existence of a Lessor Lien (including for this purpose Liens which would be Lessor Liens but for the Pass Through Documentsproviso in the definition of Lessor Liens) attributable to it (except to the extent such failure was caused by the failure of Lessee to perform any obligation under a Lessee Document), or (3C) the willful misconduct or the gross negligence of such Indemnitee, or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's ’s interest in the Engine or in the Operative DocumentsDocuments other than during the continuance of a Default or an Event of Default under the Lease, or (5E) except to the extent relating to the payment of any Expenses on an After-Tax Basis, any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b29(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)hereof, or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11F) except to the extent fairly attributable to acts, omissions or events occurring prior thereto, acts or events occurring during which occur with respect to the Term Engine or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring any Part after the earlier of: (I) the return of physical possession of the Aircraft Engine or such Part to the Owner Trustee or its designee Lessor pursuant to the terms of the Lease Lease. Lessee further agrees to indemnify Lessor against, and agrees to protect, defend, save and keep harmless Lessor from (whether or not the transactions contemplated herein or in any of the other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15Lessee Documents are consummated), (II) the termination of the Term in accordance with Section 9 of the Leaseany and all liabilities, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documentsobligations, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses payable and disbursements of whatsoever kind and nature imposed on, incurred by or asserted against Lessor pursuant to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts indemnification obligations of Lessor under any agreement with any other person relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States Engine or any Aircraft or Airframe on which it is installed. Lessee further agrees that any payment or indemnity pursuant to this Section 29(c) in respect of any Expenses or other act amounts payable by Lessee pursuant to this Section 29(c) shall be paid on an After-Tax Basis. If, by reason of any Expense payment made to or omission for the account of an Indemnitee by Lessee pursuant to this Section 29(c), such Indemnitee subsequently realizes a tax deduction or credit or any reduction in Taxes not previously taken into account in computing such payment, such Indemnitee shall promptly pay to Lessee, but only if Lessee shall have made all payments then due and owing to such Indemnitee under the Owner TrusteeLessee Documents, an amount equal to the Owner Participant or sum of (I) the actual reduction in Taxes realized by such Indemnitee, or (15) any amounts Indemnitee which is attributable to any Lien which such Indemnitee is required to remove pursuant to deduction or credit, and (II) the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases actual reduction in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits Taxes realized by such Indemnitee as a result of any payment made by such Indemnitee pursuant to this sentence; provided, however, that no Indemnitee shall be obligated to make any payment pursuant to this sentence to the accrual or payment of such Expense shall equal extent that the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of would exceed (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the aggregate amount of all prior payments pursuant to this Section 6(c) by Lessee to such Indemnitee under this Section 29(c) less (less any ii) the aggregate amount of all prior payments previously made with respect to such Tax by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excesssentence, with any excess being carried forward to offset Lessee’s obligations, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make subsequent payments to such Indemnitee pursuant to under this Section 6(c)29(c). Nothing in this Section 6(c29(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the AircraftEngine. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to LesseeLessee and Lessor; provided that the failure to give provide such notice shall not affect the release Lessee from any of its obligations to indemnify hereunder, and no payment by Lessee to an Indemnitee pursuant to this Section 29(c) shall be deemed to constitute a waiver or release of any right or remedy which Lessee hereunder except to the extent Lessee is prejudiced by may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give Lessee such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as Lessee has agreed in a writing acceptable to such Indemnitee that Lessee is liable to such Indemnitee for such Expense hereunder, in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as Lessee has agreed in a writing acceptable to such Indemnitee that Lessee is liable to such Indemnitee for such Expense hereunder, in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best reasonable efforts to obtain such severance, provided that Lessee has requested such severance and agrees to pay the reasonable out-of-pocket costs and expenses (including, without limitation, reasonable counsel fees and disbursements) incurred by such Indemnitee, if any, in connection with such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while a Default or an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Engine or on any Aircraft, Airframe or airframe on which the Trust EstateEngine is installed, or (O) if such proceeding could in the Trust Indenture Estate good faith opinion of such Indemnitee entail any risk of civil liability or any part thereof unless in such an event Lessee shall have posted criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c29(c). Such Unless a Default or an Event of Default shall have occurred and be continuing (in which case the consent of Lessee shall not be required), such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c29(c). The Lessee shall supply the affected Indemnitee and Lessor with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c29(c). Upon payment in full of any Expense or Tax pursuant to this Section 6(c)29, Lessee, or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating thereto; provided that Lessee shall not be so subrogated so long as a Default or an Event of Default has occurred and is continuing. The Such Indemnitee agrees to give such further reasonable assurances or agreements and to cooperate with provide such reasonable cooperation to Lessee or the insurers to permit Lessee or the insurers to pursue such claims, if any, to the extent reasonably requested by LesseeLessee or the insurers. If In the event that Lessee shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 29(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to Lessee an amount equal to the amount of such reimbursement (but in no event more than such payment from Lessee) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this sentence; provided, that Lessor shall not be obligated to make any payment pursuant to this Section 6(c)29(c) over to Lessee. To the extent permitted that the amount of such payment would exceed (i) the aggregate amount of all prior payments by applicable law, interest at Lessee to Lessor under this Section 29(c) less (ii) the Base Rate plus one percent (1.0%) shall be paid, on demand, on any aggregate amount or indemnity not paid when due of all prior payments by Lessor to Lessee pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable 29(c), with any excess being carried forward to Lessee by any Person pursuant offset Lessee’s obligations, if any, to make subsequent payments to Lessor under this Section 6 29(c); provided, further, that such Indemnitee shall not be paid have no obligation to reimburse Lessee if (i) a Lease Default or an Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default Airline Services Agreement shall have occurred and be continuing, been terminated or canceled or shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied have terminated in accordance with its terms or (ii) Lessee has not paid such Indemnitee all amounts required pursuant to this Section 29(c) and any other amounts then due to such Indemnitee from Lessee under any of the immediately preceding sentenceOperative Documents or Lessee Documents. Lessee’s obligations under the indemnities provided for in this Lease shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other document or instrument, and the Person seeking indemnification from Lessee pursuant to any provision of this Lease may proceed directly against Lessee without first seeking to enforce any other right of indemnification.

Appears in 1 contract

Samples: Sublease Agreement (Mair Holdings Inc)

General Indemnity. Lessee Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; or (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease)Engine, (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)Tax, or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (97) in the case of any Pass Through TrusteeTrustee or the Subordination Agent, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) 8) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee Owner or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (129) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense expense that is not reimbursable by Lessee Owner under the Operative Documents, or (1310) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (1511) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (1612) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (1713) any amount that constitutes principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. LesseeOwner's indemnity obligation to an Indemnitee under this Section 6(c6(b) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c6(b) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c6(b). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee Owner pursuant to this Section 6(c6(b) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is are not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee Owner an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c6(b) by Lessee Owner to such Indemnitee (less any payments previously made by such Indemnitee to Lessee Owner pursuant to this Section 6(c6(b)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee Owner to make payments to such Indemnitee pursuant to this Section 6(c6(b)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to LesseeOwner; provided that the failure to give such notice shall not affect the obligations of Lessee Owner hereunder except to the extent Lessee Owner is prejudiced by such failure or the LesseeOwner's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expensesexpenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at LesseeOwner's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee Owner shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee Owner with such information reasonably requested by Lessee Owner as is necessary or advisable for Lessee Owner to control or participate in any proceeding to the extent permitted by this Section 6(c6(b). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of LesseeOwner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c6(b). The Lessee Owner shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c6(b). Upon payment of any Expense pursuant to this Section 6(c6(b), LesseeOwner, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee Owner to permit Lessee Owner to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceOwner.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

General Indemnity. Lessee (i) Subject to the exclusions stated in (b) below and the other limitations in this Section 8, the Borrower hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or Indemnitee arising out of or directly resulting from (A) the executionoperation, delivery and performance possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale of any Designated Aircraft, associated Airframe or any associated Engine, or any engine used in connection with any associated Airframe or any part of any of the Operative Documents foregoing by the Borrower, any lessee or any other Person whatsoever, whether or not such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale is in compliance with the Pass Through Documents terms of the related Mortgage, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any person whatsoever and the transactions contemplated therebyclaims relating to any laws, rules or regulations pertaining to such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, sale or return including environmental control, noise and pollution laws, rules or regulations; (B) the manufacture, design, purchase, acceptance acceptance, rejection, delivery, or rejection condition of the any Designated Aircraft, associated Airframe or any Engine or Parts; (C) the Aircraft (associated Engine, any engine used in connection with any associated Airframe, or any portion thereof) or part of any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft foregoing including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or and other defects, whether or not discoverable, strict tort liability and any claim for patent, or trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1C) any representation breach of or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe observe, or any of its agreementsother noncompliance with, covenants any covenant or conditions in any agreement to be performed, or other obligation of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of Borrower under any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts falsity of any representation or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession warranty of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and Borrower in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms any of the Operative Documents Documents; (D) the offer, sale and delivery by the Borrower or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under anyone acting on behalf of the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense Borrower of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), Loan Certificates or (14) any amounts relating to the deregistration successor debt obligations issued in connection with the FAA refunding or refinancing thereof (including, without limitation, any claim arising out of the Aircraft as a result Securities Act of the Owner Participant or the Owner Trustee1933, as amended, the case may beSecurities Exchange Act of 1934, not being a Citizen of the United States as amended, or any other act Federal or omission of state statute, law or regulation, or at common law or otherwise relating to securities (collectively “Securities Liabilities”)) (the Owner Trustee, the Owner Participant or such indemnity provided in this clause (D) to extend also to any Person who controls an Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documentsits successors, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documentsassigns, or (17) principal ofemployees, or interest or premium on the Equipment Notesdirectors, or (18) any prohibited transactionofficers, servants and agents within the meaning of Section 406 of ERISA or Section 4975(c)(1) 15 of the Code, occurring with respect to the purchase or holding Securities Act of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when1933, as if, amended); and to the extent, realized or (iiE) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative DocumentsDocuments or any lease under the Mortgage for any Designated Aircraft, to assume responsibility any Event of Default under the Mortgage for and control any Designated Aircraft or the enforcement against the Borrower of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien terms thereof (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lesseeincluding, without any further actionlimitation, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect Article IX of such Expense pursuant to this Section 6(cMortgage)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Facility Agreement (Atlas Air Worldwide Holdings Inc)

General Indemnity. Lessee Owner hereby agrees to indemnify indemnify, on an ----------------- after-tax basis, each Indemnitee against, and agrees to protect, save and keep harmless and shall pay on demand each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents or the Pass Through Trust Agreements are consummated), any and all Expenses and Taxes imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the executionOperative Documents and any Permitted Lease, delivery and performance or the enforcement of any of the Operative Documents terms of any thereof; or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, design, purchase, resale, acceptance or rejection of the Airframe or any Engine or Parts; or (C) the Aircraft (or any portion thereof) or any engine Engine whether or not installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, possession, storageuse, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, sale, replacement, repair, substitution, saledisposition, return registration, reregistration or other disposition airworthiness of the Aircraft (or any portion thereof) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any damage to property or the environment, death or injury to any person and any claim for patent, trademark or copyright infringement; or (D) the offer offer, sale, holding, transfer or sale delivery of any interest in the Trust Estate Equipment Notes or the Trust Agreement or any similar interest Pass Through Certificates, whether before, on or prior to after the Delivery applicable Issuance Date (including the indemnity in this clause (D) to extend also to any violation person who controls an Indemnitee, its successors, assigns, employees, directors, officers, servants and agents within the meaning of securities laws or ERISASection 15 of the Securities Act of 1933, as amended); or (E) the offer or sale of any interest in the Equipment Notes or Confirmation, the Pass Through Certificates Documents and each Pass Through Trust Agreement (and any amendments thereto), or other evidence the enforcement of any of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including of any violation of securities laws or ERISA)thereof; provided, with respect to an Indemnitee, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.:

Appears in 1 contract

Samples: Participation Agreement (United Air Lines Inc)

General Indemnity. Lessee Sublessee hereby agrees to indemnify each Indemnitee Sublessor against, and agrees to protect, defend, save and keep it harmless each of them on an After-Tax Basis from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against Sublessor by any IndemniteeIndemnitee pursuant to SECTION 6(c) of the Participation Agreement, in any way relating to, based on or arising out of any one or more of the following: (A) the executionmanufacture, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacturedesign, purchase, acceptance or rejection of the Airframe Sublease Agreement (MSN 30808) or any Engine or Parts; (CB) only to the Aircraft (extent as it relates to Sublessee or any portion thereof) or any engine installed on Sub-sublessee, the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, sub-sublease, possession, storage, use or unworthiness, use, non-use, operation, maintenance, overhaul, testing, modification, additions, improvements, alteration, condition, replacement, repair, substitution, sale, return transfer, return, or other disposition of the Aircraft Aircraft, Airframe, Engine(s) (or any engine used on the Airframe) or any Part or part used on the Aircraft, the Airframe or any Engine (or any engine used on the Airframe) Sublessee or any other Sub-sublessee including, without limitation, any violation of law relating to the Aircraft (including environmental and noise pollution laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringementinfringement death or property damage of passengers, shippers or others (including damage or loss of cargo); (DC) the offer or sale of any interest in the Trust Estate or Aircraft, the Trust Agreement Operative Documents or any similar interest on or prior to the Delivery Date by Sublessor and any Lien relating to or arising during such period, but only to the extent such offer or sale is not in compliance with the requirements set forth in SECTION 13 or the Assignment of Sublease; (including D) breach by Sublessee of any violation of securities laws or ERISA)its covenants under the Operative Documents; or and (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence SECTION 13 of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA)Participation Agreement; providedPROVIDED, that the foregoing indemnity shall not extend to an Indemnitee Sublessor with respect to any Expense to the extent such Expense is attributable caused or directly related to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Head Lease Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Head Lease Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, other than gross negligence or willful misconduct imputed to such person solely by reason of its interest in the Aircraft, the Operative Documents or the Head Lease Documents, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe Airframe, any Engine or any Engine Part (other than during the continuance of a Lease Sublease Event of Default or pursuant to and in accordance with Sections SECTIONS 9, 10, 15 15, 19 or 19 20 of the Lease), or (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, except to the extent such offer, sale or other disposition is made while a Sublease Event of Default has occurred and is continuing and in accordance with the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) Tax, whether or not Lessee Sublessee is required to indemnify for such Tax pursuant to Section 6(bSECTION 3(j) hereof (it being understood that Section 6(bSECTION 3(j) hereof and the Sublease Tax Indemnity Agreement exclusively provide for LesseeSublessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer offer, sale or sale other disposition by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest interest, except during to the continuance of an extent such offer, sale or other disposition is made while a Head Lease Event of Default so long as such disposition (which is made also a Sublease Event of Default) has occurred and is continuing and (B) in accordance with Section 7(k)SECTION 7(i) of the Participation Agreement, or (7) in the case of the Owner Trustee in its individual and trust capacitiesauthorization, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or Sublease Agreement (MSN 30808) consents (a) are not or were not requested by Lessee or Sublessee, (b) are not occasioned by a specific requirement of the Operative Documents, or (11c) are not entered into in connection with the exercise of remedies pursuant to SECTION 15 hereof while a Sublease Event of Default has occurred and is continuing, PROVIDED that such amendment supplement, waiver or consent (as the case may be) does not have a material adverse effect on Sublessee's rights thereunder or (8) except to the extent fairly attributable to acts or events occurring occurring, or circumstances or conditions existing, during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Sublessor, Owner Trustee or its designee (including the placement in storage pursuant to the terms of the Lease (other than SECTION 5 hereof) pursuant to and in accordance with Section 15 thereofthe terms of this Sublease unless and to the extent an Expense is directly related to actions, omissions or events occurring in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to connection with the exercise of remedies under such Section 15)SECTION 15 hereof while a Sublease Event of Default has occurred and is continuing, (II) the termination of the Term in accordance with Section SECTION 9 of the Leasehereof, (III) the payment by Lessee Sublessee of all amounts required to be paid under this Sublease and the Lease other Operative Documents following an a Sublease Event of Loss or (IV) termination of the Lease this Sublease and payment by Lessee Sublessee of all amounts required to be paid by Lessee Sublessee pursuant to the terms of the Operative Documents or (129) any amount which any Indemnitee expressly agrees to pay under any Operative Document or Head Lease Document, which is not subject to reimbursement hereunder or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Sublessee under the Operative Documents, or (1310) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (1611) any loss of tax benefits or increases in tax liability whether or not the Lessee is (it being understood that Sublessee may be required to indemnify an Indemnitee Sublessor under SECTION 3(j), under the Sublease Tax Indemnity Agreement or elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) ). Sublessee shall not have any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring liability to Sublessor with respect to any indemnity due and owing under SECTION 3(k) to the purchase or holding of any Pass Through Certificate extent it is caused by (i) over the status of Sublessor or an affirmative act of Sublessor, which purchase act did not occur as a result of, and was not otherwise caused by, an act or holding the Owner Participant omission of Sublessee or any Affiliate thereof has discretion a Sub-sublessee or control (other than in the capacity during a Sublease Event of a directed trustee or custodian), Default or (ii) by an employee benefit plan, within any failure on the meaning part of Section 3(3) of ERISA, or individual retirement account or plan subject Sublessor to Section 4975 of the Code comply with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person Operative Documents or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Head Lease Documents (other than the Participation Agreementa failure which occurs during a Sublease Event of Default) to the extent that such fault is not included in a result of, or otherwise caused by, an act or omission of the definition of Supplemental RentSublessee. LesseeSublessee's indemnity obligation to an Indemnitee Sublessor under this Section 6(cSECTION 3(k) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(cSECTION 3(k) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(cSECTION 3(k). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Sublease Agreement (Atlas Air Worldwide Holdings Inc)

General Indemnity. Lessee Sublessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Sublessee Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements (including reasonable legal fees and expenses but excluding internal costs and expenses such as salaries and overhead), of whatsoever kind and nature (collectively called “Expenses”) imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or the Pass Through Sublessee Documents and or any of the transactions contemplated thereby; thereby or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof, (B) the manufacture, purchase, acceptance or rejection of the Aircraft, Airframe or any Engine or Parts; Part, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspection, leasestorage, sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine or Part affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability liability, any damage to property or the environment, death of or injury to any person and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is resulting from or arising out of or attributable to one or more of the following: (1A) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents applicable to it including, without limitation, with respect to the creation or existence of a Sublessor Lien (including for this purpose Liens which would be Sublessor Liens but for the Pass Through Documentsproviso in the definition of Sublessor Liens) attributable to it (except to the extent such failure was caused by the failure of Sublessee to perform any obligation under a Sublessee Document), or (3C) the willful misconduct or the gross negligence of such Indemnitee, or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's ’s interest in the Airframe, any Engine or in the Operative DocumentsDocuments other than during the continuance of a Default or an Event of Default under the Sublease, or (5E) except to the extent relating to the payment of any Expenses on an After-Tax Basis, any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee Sublessee is required to indemnify for such Tax pursuant to Section 6(b29(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)hereof, or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11F) except to the extent fairly attributable to acts, omissions or events occurring prior thereto, acts or events occurring during which occur with respect to the Term Airframe or actions taken (any Engine or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring Part after the earlier of: (I) the return of physical possession of the Aircraft Airframe or such Engine or Part to the Owner Trustee or its designee Sublessor pursuant to the terms of the Lease Sublease. Sublessee further agrees to indemnify Sublessor against, and agrees to protect, defend, save and keep harmless Sublessor from (whether or not the transactions contemplated herein or in any of the other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15Sublessee Documents are consummated), (II) the termination of the Term in accordance with Section 9 of the Leaseany and all liabilities, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documentsobligations, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses payable and disbursements of whatsoever kind and nature imposed on, incurred by or asserted against Sublessor pursuant to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14Section 7(c) any amounts relating to the deregistration with the FAA of the Aircraft as a result Participation Agreement. [In addition, notwithstanding the termination of the Owner Participant Predecessor Lease [and the Original Predecessor Lease], Sublessee hereby confirms and agrees that Sublessee remains fully obligated with respect to any and all claims asserted by Sublessor and any Indemnitee (as such term is defined in the Predecessor Lease [or in the Owner TrusteeOriginal Predecessor Lease, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15]) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(129(c) of the CodePredecessor Lease [or pursuant to Section 29(c) of the Original Predecessor Lease, occurring with as the case may be].] Sublessee further agrees that any payment or indemnity pursuant to this Section 29(c) in respect of any Expenses or other amounts payable by Sublessee pursuant to this Section 29(c) shall be paid on an After-Tax Basis. If, by reason of any Expense payment made to or for the account of an Indemnitee by Sublessee pursuant to this Section 29(c), such Indemnitee subsequently realizes a tax deduction or credit or any reduction in Taxes not previously taken into account in computing such payment, such Indemnitee shall promptly pay to Sublessee, but only if Sublessee shall have made all payments then due and owing to such Indemnitee under the Sublessee Documents, an amount equal to the purchase sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or holding of any Pass Through Certificate credit, and (iII) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than actual reduction in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits Taxes realized by such Indemnitee as a result of any payment made by such Indemnitee pursuant to this sentence; provided, however, that no Indemnitee shall be obligated to make any payment pursuant to this sentence to the accrual or payment of such Expense shall equal extent that the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of would exceed (i) the aggregate amount of all prior payments by Sublessee to such tax savings, plus any additional tax savings recognized as Indemnitee under this Section 29(c) less (ii) the result aggregate amount of any payment made all prior payments with respect to such Tax by such Indemnitee to Sublessee pursuant to this sentence, when, as if, and with any excess being carried forward to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excessoffset Sublessee’s obligations, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make subsequent payments to such Indemnitee pursuant to under this Section 6(c)29(c). Nothing in this Section 6(c29(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or Sublessee of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to LesseeSublessee and Sublessor; provided that the failure to give provide such notice shall not affect the release Sublessee from any of its obligations to indemnify hereunder, and no payment by Sublessee to an Indemnitee pursuant to this Section 29(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to the extent Lessee is prejudiced by any right or remedy which Sublessee may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give Sublessee such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee Sublessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as Sublessee has agreed in a writing acceptable to such Indemnitee that Sublessee is liable to such Indemnitee for such Expense hereunder, in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as Sublessee has agreed in a writing acceptable to such Indemnitee that Sublessee is liable to such Indemnitee for such Expense hereunder, in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best reasonable efforts to obtain such severance, provided that Sublessee has requested such severance and agrees to pay the reasonable out-of-pocket costs and expenses (including, without limitation, reasonable counsel fees and disbursements) incurred by such Indemnitee, if any, in connection with such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee Sublessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while a Default or an Event of Default or an Event of Default (as such term is defined in the Head Lease) or a Default (as such term is defined in the Head Lease) of the type referred to in Section 14(a), 14(b) or 14(e) of the Head Lease shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate or the Trust Estate or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any risk of civil liability or criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee Sublessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee Sublessee with such information reasonably requested by Lessee Sublessee as is necessary or advisable for Lessee Sublessee to control or participate in any proceeding to the extent permitted by this Section 6(c29(c). Such Unless a Default or an Event of Default shall have occurred and be continuing (in which case the consent of Sublessee shall not be required), such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of LesseeSublessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c29(c). The Lessee Sublessee shall supply the affected Indemnitee and Sublessor with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c29(c). Upon payment in full of any Expense or Tax pursuant to this Section 6(c)29, LesseeSublessee, or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating thereto; provided that Sublessee shall not be so subrogated so long as a Default or an Event of Default has occurred and is continuing. The Such Indemnitee agrees to give such further reasonable assurances or agreements and to cooperate with Lessee provide such reasonable cooperation to Sublessee or the insurers to permit Lessee Sublessee or the insurers to pursue such claims, if any, to the extent reasonably requested by LesseeSublessee or the insurers. If In the event that Sublessee shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 29(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to Sublessee an amount equal to the amount of such reimbursement (but in no event more than such payment from Sublessee) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this sentence; provided, that Sublessor shall not be obligated to make any payment pursuant to this Section 6(c)29(c) over to Lessee. To the extent permitted that the amount of such payment would exceed (i) the aggregate amount of all prior payments by applicable law, interest at Sublessee to Sublessor under this Section 29(c) less (ii) the Base Rate plus one percent (1.0%) shall be paid, on demand, on any aggregate amount or indemnity not paid when due of all prior payments by Sublessor to Sublessee pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable 29(c), with any excess being carried forward to Lessee by any Person pursuant offset Sublessee’s obligations, if any, to make subsequent payments to Sublessor under this Section 6 29(c); provided, further, that such Indemnitee shall not be paid have no obligation to Lessee reimburse Sublessee if (i) a Lease Default or an Event of Default or an Event of Default (as such term is defined in the Head Lease) has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default Airline Services Agreement shall have occurred and be continuing, been terminated or canceled or shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied have terminated in accordance with its terms or (ii) Sublessee has not paid such Indemnitee all amounts required pursuant to this Section 29(c) and any other amounts then due to such Indemnitee from Sublessee under any of the immediately preceding sentenceOperative Documents or Sublessee Documents. Sublessee’s obligations under the indemnities provided for in this Sublease shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other document or instrument, and the Person seeking indemnification from Sublessee pursuant to any provision of this Sublease may proceed directly against Sublessee without first seeking to enforce any other right of indemnification.

Appears in 1 contract

Samples: Sublease Agreement (Pinnacle Airlines Corp)

General Indemnity. Lessee (a) The Borrower hereby agrees to indemnify on an After-Tax Basis each Indemnitee against, and agrees to protect, save and keep hold harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of or which would not have occurred but for (A1) the execution, delivery and performance of the Operative Documents or the Pass Through Borrower Loan Documents and the consummation of the transactions contemplated therebythereby or any Default or Event of Default thereunder and the enforcement of any of the terms thereof; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C2) the Aircraft (or any item or other portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed installed, whether or not arising out of the manufacture, design, ordering, acceptance, rejection, acquisition, installation, purchase, registration, reregistrationre-registration, refinancing, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, storage, maintenance, overhaul, modification, alteration, condition, replacement, repair, loss, damage, destruction, removal, substitution, sale, return return, surrender or other disposition of the Aircraft (or any item or other portion thereof) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict products liability, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer , environmental liability or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt an Applicable Law relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, PROVIDED that the foregoing indemnity shall not extend to of an Indemnitee with respect shall only apply for claims relating to Lender in its capacity as lender under the Borrower Loan Documents and not to Lender in its capacity, if any, as manufacturer, repairer, supplier or aircraft servicing agent, or any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any express representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Borrower Loan Documents being incorrect, ; or (2B) the failure by such Indemnitee to perform or observe any of its agreementsexpress agreement, covenants covenant or conditions condition in any of the Operative Borrower Loan Documents except to the extent such failure by such Indemnitee proximately results from any failure by the Borrower to observe any covenant, agreement or condition applicable to the Pass Through Documents, Borrower in any Borrower Loan Document; or (3C) the willful misconduct or the gross negligence of or violation of law by such Indemnitee, Indemnitee (other than any of the foregoing imputed to such Indemnitee solely by reason of its interest in the Aircraft or being party to the Borrower Loan Documents); or (4D) (A) in the case of any Indemnitee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA as contemplated by the Security Agreement) or Section 4975 in any of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)Borrower Loan Documents other than, or (6) in the case of the Owner Participanteach case, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of a Specified Default or an Event of Default so long as such disposition is made in accordance with Section 7(k)under this Loan Agreement or (E) any Tax, or any loss of Tax benefits or increase in Tax liability under any Tax law, PROVIDED, HOWEVER, that this CLAUSE (7E) in the case shall not apply to any obligation of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure Borrower under Section 2.b or to Taxes arising from making any payment pursuant to this SECTION 9.12 on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, an After-Tax Basis; or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10F) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Borrower Loan Documents which amendments, supplements, waivers or consents (ax) are not or were not requested by Lessee or the Borrower, (by) are not occasioned by a specific requirement of the Operative Documents, Borrower Loan Documents and (z) are not entered into pursuant to a Default or an Event of Default; or (11H) except to the extent fairly attributable resulting from a breach of the Borrower representations contained in SECTION 3.2, the offer, sale or delivery by such Indemnitee in violation of the Securities Act or a violation by such Indemnitee of any other applicable law or regulation relating to the transfer of any Note, or (I) except to the extent caused by acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Termprior thereto, actions taken (or required to be taken and not taken) acts or events occurring which occur after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (IIIx) the payment by Lessee the Borrower of all amounts required to be paid under the Lease Borrower Loan Documents following an Event a Total Loss and termination of Loss the Loan; or (IVy) termination of the Lease Loan and payment by Lessee the Borrower of all amounts required to be paid by Lessee Borrower pursuant to the terms of the Operative Documents Borrower Loan Documents; or (12J) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lender Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Loan Agreement (Republic Airways Holdings Inc)

General Indemnity. Lessee Subject to the next following paragraph but without limiting any other rights that any Indemnitee may ----------------- have under the other Operative Documents or applicable law, the Borrower hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or Indemnitee arising out of or resulting from (Ai) the executionoperation, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacturepossession, purchaseuse, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturemaintenance, purchaseoverhaul, testing, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspectionnon-delivery, lease, subleasenonuse, modification, alteration, or sale of any Aircraft, Airframe or Engine, or any engine used in connection with any Airframe or any part of any of the foregoing by the Borrower, any lessee or any other Person whatsoever, whether or not such operation, possession, storage, use or non-use, operation, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition sale is in compliance with the terms of the Aircraft Mortgage, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any violation of law person whatsoever and claims relating to the Aircraft (any laws, rules or regulations pertaining to such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, sale or return including environmental control, noise and pollution laws), rules or regulations; (ii) the manufacture, design, purchase, acceptance, rejection, delivery, or condition of any Aircraft, Airframe or Engine, any engine used in connection with any Airframe, or any part of any of the foregoing including, without limitation, latent or and other defects, whether or not discoverable, strict tort liability and any claim for patent, or trademark or copyright infringement; (Diii) any breach of or failure to perform or observe, or any other noncompliance with, any covenant or agreement to be performed, or other obligation of the offer Borrower under any of the Operative Documents, or sale the falsity of any interest representation or warranty of the Borrower in any of the Trust Estate Operative Documents; and (iv) any Event of Default hereunder or the Trust Agreement or any similar interest on or prior to enforcement against the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale Borrower of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISAincluding, without limitation, Section 12 hereof); provided, that the . The foregoing indemnity shall not extend to an Indemnitee with respect to any Expense of any Indemnitee to the extent such Expense is attributable to one or more of the following: (1) any representation acts or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) omissions involving the willful misconduct or the gross negligence of such Indemnitee, Indemnitee or (4) (A) in the case any Person acting on behalf of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part (other than gross negligence imputed to such Indemnitee solely by reason of its interest in the Airframe or an Aircraft, as finally determined by a court of competent jurisdiction); (2) any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTax, or increase in tax liability under any tax law (5such matter being the subject to the indemnity in Sections 8(b) any Tax and (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 belowc) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(bhereof); (3) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Administrative Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement Operative Documents any amounts received and distributable by it thereunder; (4) any breach of undertaking or any misrepresentation contained herein or in any other Operative Document to which such Indemnitee is a party or any agreement relating hereto or thereto by such Indemnitee and in each case not attributable directly to any breach of undertaking, any misrepresentation or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents noncompliance with respect to any of the terms hereof or of any other Operative Documents which amendments, supplements, waivers Document or consents any agreement relating hereto or thereto by Borrower; (a5) are not or were not requested by Lessee attributable to a Lender Lien; or (b6) are not occasioned by any Expenses as a specific requirement result of a violation of the Operative DocumentsSecurities Act (as defined below) relating to or arising out of the offer, issuance, sale or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken delivery by any Indemnitee (or required to be taken and not taken) during any person who controls an Indemnitee within the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return meaning of possession Section 15 of the Aircraft to Securities Act of 1933 (the Owner Trustee "Securities Act"), as amended) of -------------- Commercial Paper or its designee any security based upon the credit of the Borrower. The Borrower further agrees that any payment or indemnity pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c8(a) shall survive for so long as Lessor in respect of any "Expense" shall be entitled to exercise remedies under such Section 15)in an amount which, (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee after deduction of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts Taxes required to be paid by Lessee pursuant such recipient with respect to such payment or indemnity under the terms laws of any federal, state or local government or taxing authority in the Operative Documents United States, or (12) under the laws of any amount which any Indemnitee expressly agrees to pay under any Operative Document taxing authority or governmental subdivision of a foreign country, or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, territory or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act or omission of the Owner Trusteeinternational authority, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of (A) the amount described of such Expense over (B) the net reduction in clause (i) over Taxes required to be paid by such recipient resulting from the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations accrual or payment of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the AircraftExpense. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee (or its agent) shall promptly after receiving such notice give notice of such claim to Lesseethe Borrower; provided that the failure to give provide such notice shall not affect release the Borrower from any of its obligations of Lessee to indemnify hereunder except to the extent Lessee that the Borrower is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of the failure to give such failurenotice in a timely fashion, and no payment by the Borrower to an Indemnitee pursuant to this Section 8(a) shall be deemed to constitute a waiver or release of any right or remedy which the Borrower may have against such Indemnitee for any actual damages as a result of the failure by such Indemnitee to give the Borrower such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Borrower shall be entitled, at its sole cost and expense, acting through a single counsel reasonably acceptable to the respective Indemnitee, so long as the Borrower has acknowledged in writing its responsibility for such Expense hereunder (unless such Expense is covered by the second paragraph of this Section 8(a), except that such acknowledgment does not apply if the decision of a court or arbitrator provides that the Borrower is not liable hereunder), (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best reasonable efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lesseethe Borrower's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Borrower pursuant to the preceding provisions. Notwithstanding any of the foregoing, the Borrower shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if any Event of Default shall have occurred and be continuing, if such proceedings will involve a material risk of the sale, forfeiture or loss of an Aircraft unless the Borrower shall have posted a bond or other security reasonably satisfactory to the relevant Indemnitee with respect to such risk or if such proceedings could entail any risk of criminal liability being imposed on such Indemnitee. The affected Indemnitee shall supply Lessee the Borrower with such information reasonably requested by Lessee the Borrower as is necessary or advisable for Lessee the Borrower to control or participate in any proceeding to the extent permitted by this Section 6(c8(a). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Borrower, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c8(a). The Lessee shall supply In the case of any Expense indemnified by Borrower hereunder which is covered by a policy of insurance maintained by Borrower, each Indemnitee agrees, at Borrower's expense, to cooperate reasonably with the insurers in the exercise of their rights to investigate, defend or compromise such information loss or liability as may be reasonably requested by required to retain the Indemnitee as is necessary benefits of such insurance with respect to such loss or advisable for the Indemnitee to control or participate in any proceeding to liability. To the extent permitted by this Section 6(c). Upon of any payment of any Expense pursuant to this Section 6(c8(a), Lesseethe Borrower, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Borrower to permit Lessee the Borrower to pursue such claims, if any, to the extent reasonably requested by Lesseethe Borrower. If In the event that the Borrower shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 8(a), and such Indemnitee subsequently shall be reimbursed in whole or in partrespect of such indemnified amount from any other Person, with respect to any Expense paid by Lessee hereunder, it will such Indemnitee shall promptly pay the Borrower the amount refundedof such reimbursement, including interest received thereto (but not an amount in excess of the amount Lessee attributable thereto, provided that no Special Default or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Credit Agreement (Frontier Airlines Inc /Co/)

General Indemnity. Scope. Lessee hereby agrees to indemnify indemnify, defend, reimburse and hold harmless, to the fullest extent permitted by Law, each Indemnitee against, from and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), against any and all Expenses imposed on, incurred by or asserted against any Indemnitee, Claims which in any way relating tomay result from, based on pertain to or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions arise in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal manner out of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims manner related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, to: Xxxxxxxxxx XX-600-2C10; MSN 10070 the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document, or the breach of any representation, warranty, covenant or Obligation made or to be performed by Lessee hereunder or thereunder; or the condition, design, ownership, manufacture, purchase, delivery, non-delivery, lease, possession, return, disposition, use, or operation of the Aircraft either in the air or on the ground; or any defect in the Aircraft or any Item of Equipment (whether or not discovered or discoverable by Lessee or Lessor) arising from the material or any articles used therein or from the design, testing, or use thereof or from any maintenance, service, repair, overhaul, or testing of the Aircraft or any Item of Equipment, whether or not the Aircraft or any Item of Equipment is in the possession of Lessee, and regardless of where the Aircraft or any Item of Equipment may then be located; or the accuracy, validity or traceability of any of the Aircraft Documents; or any en route navigation charges, navigation service charges, airport charges and landing fees and all other charges payable in connection with the use of or for services provided at any airport or by any navigation service or Governmental Authority, whether in respect of the Aircraft or any other aircraft owned, leased or operated by Lessee; or any lawful action taken by any Indemnitee in relation to the release or attempt to release the Aircraft from any arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft; or any act or omission of Lessee which invalidates or which renders voidable any Insurances or which is outside the scope of, or excluded from, the coverage thereof. Any such amount Upon payment in full to any Indemnitee of any indemnities contained in this Article 18 by Lessee, Lessee shall be held by subrogated to all rights and remedies which such Person (indemnified party has or may have against the Manufacturer or any other Person. If any Indemnitee or Lessee has knowledge of any Claim for which Lessee is obligated to indemnify under this Article 18, it shall comply with 18.4 below. Lessee's Release. Lessee hereby granting a security interest waives and releases each Indemnitee from any Claims (whether existing now or hereafter arising) for or on account of or arising or in such amount any way connected with injury to such Person) and, if a Lease Event or death of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder personnel of Lessee or loss or damage to such Person as and when due (and, property of Lessee or the loss of use of any property which may result from or arise in any manner out of or in relation to the extent that Lessee has no obligations hereunder to ownership, leasing, condition, use or operation of the Aircraft or any Item of Equipment, either in the air or on the ground, or which may be caused by any defect in the Aircraft or any Item of Equipment from the material or any article used therein or from the design or testing thereof, or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft or any Item of Equipment regardless of when such Persondefect may be discovered, such amount shall be paid to whether or not the Aircraft or any Item of Equipment is at the time in the possession of Lessee). At such time as there shall not be continuing , and regardless of the location of the Aircraft or any Item of Equipment at any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.time. Xxxxxxxxxx XX-600-2C10; MSN 10070

Appears in 1 contract

Samples: Aircraft Lease Agreement (Mesa Air Group Inc)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements (including reasonable legal fees and expenses and Transaction Expenses to the extent not required to be paid by the Owner Trustee or the Owner Participant pursuant to Section 16 hereof but excluding internal costs and expenses such as salaries and overhead), of whatsoever kind and nature (collectively called "Expenses") imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any sublease or sub-sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Liquidity Provider, the Intercreditor Agreement and the transactions contemplated thereby; Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; , (D) the offer, sale or delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any person who controls an Indemnitee within the meaning of Section 15 of the Securities Act of 1933, as amended) or (E) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest with respect to the Aircraft on or prior to the Delivery Date (including any violation of securities laws or ERISA)Date; or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the Pass Through Documents Trust Agreements or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the Pass Through DocumentsTrust Agreements applicable to it including, without limitation, the creation or existence of a Lessor Lien (including for this purpose Liens which would be Lessor Liens but for the proviso in the definition of Lessor Liens), a Loan Participant Lien or an Indenture Trustee's Lien (except to the extent such failure was caused directly by the failure of Lessee to perform any obligation under a Lessee Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in with respect to the case of any IndemniteeOwner Trustee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee the Owner Trustee of all or any part of its interest in the Airframe or any Engine (other than during as contemplated by the continuance of a Lease Event of Default or pursuant the Trust Indenture) or with respect to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Airframe, any Engine or in the Operative DocumentsDocuments other than during the continuance of an Event of Default under the Lease, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6F) in the case of an Indemnitee which is the Owner Participant or the Owner Trustee (in its individual or trust capacity) (other than in connection with an Event of Default) or, in connection with an exercise of remedies under the Trust Indenture upon a default thereunder (other than a default under Section 4.02(a) of the Trust Indenture), the Indenture Trustee or a Loan Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k)interest, or (7G) in the case of an Indemnitee which is the Owner Participant or the Owner Trustee (in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to use ordinary care to distribute in accordance with the Trust Agreement any amounts received and distributable by it thereunder, or (8) and in the case of an Indemnitee which is a Loan Participant, a Certificate Holder or the Indenture Trustee (in its individual or trust capacity) and trust capacitiesthe affiliates, successors and assigns thereof, a failure on the part of the Indenture Trustee to use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10H) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsother than such as have been consented to, supplementsapproved, waivers authorized or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsLessee, or (11I) subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not Lessee is required to indemnify therefor pursuant to this Agreement or the Tax Indemnity Agreement, or (J) except to the extent fairly attributable to acts, omissions or events occurring prior thereto, acts or events occurring during which occur with respect to the Term Airframe, any Engine or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring any Part after the earlier earliest of: (I) the return of possession of the Aircraft Airframe or such Engine or Part to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15)Lease, (II) the termination of the Term Lease in accordance with Section 9 or Section 19 thereof or (Ill) the commencement of storage pursuant to Section 5(d) of the Lease, or (IIIK) the payment by Lessee of all amounts required any Expense which is specified to be paid for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under the Lease following an Event of Loss any Operative Document, or (IVL) as to any Indemnitee the funding of such Indemnitee's participation in the transaction contemplated by the Operative Documents giving rise to a "prohibited transaction" within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA. The foregoing indemnity shall not extend to any Expense to the extent that such Expense is not caused by, or does not arise out of, an act, omission or event which occurs prior to the termination of the Lease and the payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents. Lessee further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the Owner Trusteeaccount of an Indemnitee by Lessee pursuant to this Section 7(c), the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to remove pursuant Lessee, but only if Lessee shall have made all payments then due and owing to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an such Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c))sentence. Nothing in this Section 6(c7(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes Secured Certificates or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to Lessee; provided that the failure to give provide such notice shall not affect release Lessee from any of its obligations to indemnify hereunder, and no payment by Lessee to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of any right or remedy which the obligations of Lessee hereunder except to the extent Lessee is prejudiced by may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give Lessee such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as Lessee has agreed in a writing acceptable to such Indemnitee that Lessee is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as Lessee has agreed in a writing acceptable to such Indemnitee that Lessee is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate or the Trust Estate or any part thereof unless thereof, or (0) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When Lessee or the insurers under a policy of insurance maintained by Lessee (or any Sublessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of Lessee or such insurers, provided that no such defense shall be compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee's prior consent. In the case of any Expense indemnified by Lessee hereunder which is covered by a policy of insurance maintained by Lessee (or any Sublessee) pursuant to Section 11 of the Lease or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by Lessee (or any Sublessee) pursuant to Section 11 of the Lease or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, LesseeLessee or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 or 7.01 of the Trust Indenture or Section 5.03 or 7.01 of the Trust Agreement. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee or the insurers to permit Lessee or the insurers to pursue such claims, if any, to the extent reasonably requested by LesseeLessee or the insurers. If In the event that Lessee shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to Lessee an amount equal to the amount of such reimbursement (but in no event more than such payment from Lessee) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, provided that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse Lessee if Lessee has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from Lessee under any of the Lease or any other Operative DocumentDocuments. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such under the indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person as and when due (and, indemnified shall also be indemnified with respect to the extent that same matter under the terms of any other document or instrument, and the Person seeking indemnification from Lessee has no obligations hereunder pursuant to any provision of this Agreement may proceed directly against Lessee without first seeking to enforce any other right of indemnification. Lessee agrees to pay the reasonable fees and expenses of the Indenture Trustee and the Owner Trustee for acting as such, other than such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due fees and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceexpenses which constitute Transaction Expenses.

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Holdings Corp/Pred)

General Indemnity. Lessee The Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements, of whatsoever kind and nature (collectively called "EXPENSES") imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any lease or sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Liquidity Provider, the Intercreditor Agreement and the transactions contemplated thereby; Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; infringement or (D) the offer offer, sale or sale delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any interest in person who controls an Indemnitee within the Trust Estate or meaning of Section 15 of the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation Securities Act of securities laws or ERISA1933, as amended); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, PROVIDED that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the any Pass Through Documents Trust Agreement or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the any Pass Through DocumentsTrust Agreement applicable to it including, without limitation, the creation or existence of a Loan Participant Lien or an Indenture Trustee's Lien (except to the extent such failure was caused directly by the failure of the Owner to perform any obligation under an Owner Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its such Indemnitee's interest in the Airframe or Airframe, any Engine (or in the Operative Documents other than during the continuance of a Lease an Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of under the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTrust Indenture, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee the Owner is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and provides for the Tax Indemnity Agreement exclusively provide for LesseeOwner's liability with respect to Taxes), or (6F) in the case of the Owner an Indemnitee which is a Loan EXHIBIT L-1 Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate a Certificate Holder or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or Indenture Trustee (7) in the case of the Owner Trustee in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Indenture Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10G) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsDocuments, supplementsthe Intercreditor Agreement, waivers any of the Liquidity Facilities or consents (a) are not any Pass Through Trust Agreement other than such as have been consented to, approved, authorized or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsOwner, or (11H) except subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not the Owner is required to indemnify therefor pursuant to this Agreement, or (I) any Expense which is specified to be for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under any Operative Document, or (J) as to any Indemnitee the funding of such Indemnitee's participation in the transaction contemplated by the Operative Documents giving rise to a "prohibited transaction" within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA. The foregoing indemnity shall not extend to any Expense to the extent fairly attributable that such Expense is not caused by, or does not arise out of, an act, omission or event which occurs prior to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 Lien of the Lease, (III) Trust Indenture and the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Owner under the Operative Documents. The Owner further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the account of an Indemnitee by the Owner Trusteepursuant to this Section 7(c), such Indemnitee subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to the Owner, but only if the Owner Participant or such Indemnitee, or (15) any amounts attributable shall have made all payments then due and owing to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraftsentence. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to Lesseethe Owner; provided PROVIDED that the failure to give provide such notice shall not affect release the Owner from any of its obligations to indemnify hereunder, and no payment by the Owner to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to any right or remedy which the extent Lessee is prejudiced by Owner may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give the Owner such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Owner EXHIBIT L-2 shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee the Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate Collateral or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee the Owner with such information reasonably requested by Lessee the Owner as is necessary or advisable for Lessee the Owner to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee Owner shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When the Owner or the insurers under a policy of insurance maintained by the Owner (or any Lessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of the Owner or such insurers, provided that no such defense shall be compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee's prior consent. In the case of any Expense indemnified by the Owner hereunder which is covered by a policy of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a condition of such indemnity with respect to any EXHIBIT L-3 particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, Lesseethe Owner or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 of the Trust Indenture. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Owner or the insurers to permit Lessee the Owner or the insurers to pursue such claims, if any, to the extent reasonably requested by Lesseethe Owner or the insurers. If In the event that the Owner shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to the Owner an amount equal to the amount of such reimbursement (but in no event more than such payment from the Owner) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, PROVIDED that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse the Owner if the Owner has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from the Owner under any of the Operative Documents. The Owner's obligations under the Lease indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other Operative Documentdocument or instrument, and the Person seeking indemnification from the Owner pursuant to any provision of this Agreement may proceed directly against the Owner without first seeking to enforce any other right of indemnification. Any such amount shall be held by such Person EXHIBIT X-0 XXXXXXX X-0 TO PARTICIPATION AGREEMENT [Form of Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx special counsel for the Owner and the Guarantor] [________ ___, ____] The Persons Listed on Annex A hereto Ladies and Gentlemen: We have acted as counsel to Northwest Airlines Corporation, a Delaware corporation ("NWA Corp."), and Northwest Airlines, Inc., a Minnesota corporation (the Lessee hereby granting a security interest "Company"), in such connection with the issuance and sale of (i) $201,112,000 aggregate principal amount to such Personof 7.041% Pass Through Trust Certificates, Series 2001-1A-1 (the "Class A-1 Certificates"), (ii) and$156,613,000 aggregate principal amount of 6.841% Pass Through Trust Certificates, if a Lease Event Series 2001-1A-2 (the "Class A-2 Certificates"), (iii) $116,500,000 aggregate principal amount of Default shall have occurred 7.691% Pass Through Trust Certificates, Series 2001-1B (the "Class B Certificates") and be continuing(iv) $106,820,000 aggregate principal amount of 7.626% Pass Through Trust Certificates, shall be applied against Lessee's obligations hereunder to such Person as and when due Series 2001-1C (and, the "Class C Certificates") pursuant to the extent that Lessee has no obligations hereunder Underwriting Agreement, dated as of May 22, 2001 (the "Underwriting Agreement"), by and among Xxxxxxx Xxxxx Barney Inc., X.X. Xxxxxx Securities Inc., Credit Suisse First Boston Corporation, Deutsche Banc Alex. Xxxxx Inc., Xxxxxx Xxxxxxx & Co. Incorporated and U.S. Bancorp Xxxxx Xxxxxxx Inc., as underwriters, the Company and NWA Corp. [and the issuance and sale of $[__________] aggregate principal amount of [___]% Pass Through Certificates, Series 2001-1D (the "Class D Certificates") pursuant to such Persona private placement -- A319's and 757's] (the Class A-1 Certificates, such amount shall be paid to Lessee)the Class A-2 Certificates, the Class B Certificates [and] the Class C Certificates [and the Class D Certificates-- A319's and 757's], the "Certificates") Capitalized terms used herein unless otherwise defined herein have the respective meanings given them in the Underwriting Agreement. At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to In connection with this opinion we have examined the extent not previously applied in accordance with the immediately preceding sentence.following:

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Corp)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Lessee Documents, the Pass Through Trust Agreements or any other Operative Documents to which Lessee is a party are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions Transactions contemplated hereby and thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or use, non-use, operation, maintenance, overhaul, testing, modification, alteration, condition, replacement, repair, substitution, sale, return transfer, return, or other disposition of the Aircraft Aircraft, Airframe, Engine(s) (or any engine used on the Airframe) or any Part or part used on the Aircraft, the Airframe or any Engine (or any engine used on the Airframe) by Lessee, any Sublessee or any other Person including, without limitation, any violation of law relating to the Aircraft (including environmental and noise pollution laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Aircraft, the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA)) and any Lien relating to or arising during such period; or (E) the offer offer, sale or sale delivery of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); and (F) the Transactions contemplated by the Lessee Documents, the Pass Through Trust Agreements and the other Operative Documents to which the Lessee is a party; provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable directly related to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect (except to the extent such representation or warranty was based on a Lessee representation or warranty which was incorrect), or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe Airframe, any Engine or any Engine Part (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 15, 19 or 19 20 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, except to the extent such offer, sale or other disposition is made while a Lease Event of Default has occurred and is continuing and in accordance with the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer offer, sale or sale other disposition by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during to the continuance of an extent such offer, sale or other disposition is made (A) while a Lease Event of Default so long as such disposition has occurred and is made continuing and (B) in accordance with Section 7(k7(j), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement Agreements amounts received and distributable thereunder, or (10) the authorization or authorization, giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or Lessee, (b) are not occasioned by a specific requirement of the Operative Documents, and (c) are not entered into in connection with the exercise of remedies pursuant to Section 15 of the Lease while a Lease Event of Default has occurred and is continuing or (11) except to the extent fairly attributable to acts or events occurring occurring, or circumstances or conditions existing, during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee (including the placement in storage pursuant to the terms Section 5 of the Lease (other than Lease) pursuant to and in accordance with the terms of the Lease unless and to the extent an Expense is directly related to actions, omissions or events occurring in connection with the exercise of remedies under Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15)of the Lease while a Lease Event of Default has occurred and is continuing, (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease and the other Operative Documents following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-out- of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, other than during the continuance of a Lease Event of Default when the Lease has been duly declared (or deemed declared) in default and the Owner Trustee is exercising remedies thereunder seeking to dispossess Lessee of its interest in the Aircraft or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, Notes or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity indemnity, such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). No Indemnitee shall have any obligation to make any such payment while a Lease Event of Default has occurred and is continuing. Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure to give notice in a timely manner or the Lessee's indemnification obligations are increased as a result of such failure, in which case, Lessee's obligations shall be released to the extent of such increase. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best commercially reasonable efforts to obtain such severance), ) and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such riskrisk or if such proceedings could result in any criminal liability for an Indemnitee. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, except as otherwise provided herein, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one two percent (1.02.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 6(c) until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 6(c) shall not be paid to Lessee if a Specified Default or Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Documentcontinuing. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Specified Default or Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Specified Default or Lease Event of Default or there shall not be due and owing any such paymentDefault, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

General Indemnity. Lessee hereby agrees to indemnify Buyer assumes liability for, indemnifies each ----------------- Indemnitee against, against and agrees to shall protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated)Indemnitee from, on an after-tax basis, any and all Expenses liabilities, obligations, losses, damages, penalties, claims (including claims for liability in tort, strict or otherwise), actions, suits, costs, expenses and disbursements (including, without limitation, reasonable legal fees and disbursements) of whatsoever kind and nature (collectively, "Liabilities"), imposed on, incurred by or asserted against any Indemnitee, Indemnitee in any way relating to, based on to or arising out of (Aa) the executionBuyer's obligations pursuant to any Operative Document, delivery and performance of the payments made pursuant to any Operative Document, any other transaction contemplated by any Operative Documents or the Pass Through Documents and exercise of remedies under any Operative Document, (b) any non- compliance by the transactions contemplated thereby; Buyer with the terms of any Operative Document, or (Bc) the manufacturedelivery, non-delivery, warehousing, storage, transportation, removal, sale, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alterationsublease, condition, replacementmaintenance, repair, substitution, sale, or return or other disposition pursuant to this Agreement of the Aircraft including, without limitation, Equipment or any violation part thereof or any accident in connection with any Equipment on or after the date of law relating to the Aircraft this Agreement (including environmental laws), without limitation latent or other defects, whether or not discoverable, strict tort liability and any claim claims for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that but the foregoing indemnity shall not extend to an any Liabilities of any Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1i) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) resulting from the willful misconduct or the gross negligence of such Indemnitee, or (4ii) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly solely attributable to acts or events occurring during not attributable to Buyer that occur prior to the Term Effective Date of this Agreement or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft Equipment has been redelivered to the Owner Trustee or its designee pursuant to Seller in accordance with all the terms of the Lease (other than pursuant to this Agreement and in accordance Buyer has fully complied with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination all provisions of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified Agreement with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceredelivery.

Appears in 1 contract

Samples: Aircraft Conditional Sale Agreement (Airfund International Limited Partnership)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Lessee Documents, the Pass Through Trust Agreements or any other Operative Documents to which Lessee is a party are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions Transactions contemplated hereby and thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or use, non-use, operation, maintenance, overhaul, testing, modification, alteration, condition, replacement, repair, substitution, sale, return transfer, return, or other disposition of the Aircraft Aircraft, Airframe, Engine(s) (or any engine used on the Airframe) or any Part or part used on the Aircraft, the Airframe or any Engine (or any engine used on the Airframe) by Lessee, any Sublessee or any other Person including, without limitation, any violation of law relating to the Aircraft (including environmental and noise pollution laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Aircraft, the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA)) and any Lien relating to or arising during such period; or (E) the offer offer, sale or sale delivery of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); and (F) the Transactions contemplated by the Lessee Documents, the Pass Through Trust Agreements and the other Operative Documents to which the Lessee is a party; provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable directly related to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect (except to the extent such representation or warranty was based on a Lessee representation or warranty which was incorrect), or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe Airframe, any Engine or any Engine Part (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 15, 19 or 19 20 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, except to the extent such offer, sale or other disposition is made while a Lease Event of Default has occurred and is continuing and in accordance with the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer offer, sale or sale other disposition by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during to the continuance of an extent such offer, sale or other disposition is made (A) while a Lease Event of Default so long as such disposition has occurred and is made continuing and (B) in accordance with Section 7(k7(j), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement Agreements amounts received and distributable thereunder, or (10) the authorization or authorization, giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or Lessee, (b) are not occasioned by a specific requirement of the Operative Documents, and (c) are not entered into in connection with the exercise of remedies pursuant to Section 15 of the Lease while a Lease Event of Default has occurred and is continuing or (11) except to the extent fairly attributable to acts or events occurring occurring, or circumstances or conditions existing, during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee (including the placement in storage pursuant to the terms Section 5 of the Lease (other than Lease) pursuant to and in accordance with the terms of the Lease unless and to the extent an Expense is directly related to actions, omissions or events occurring in connection with the exercise of remedies under Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15)of the Lease while a Lease Event of Default has occurred and is continuing, (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease and the other Operative Documents following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, other than during the continuance of a Lease Event of Default when the Lease has been duly declared (or deemed declared) in default and the Owner Trustee is exercising remedies thereunder seeking to dispossess Lessee of its interest in the Aircraft or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, Notes or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity indemnity, such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). No Indemnitee shall have any obligation to make any such payment while a Lease Event of Default has occurred and is continuing. Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure to give notice in a timely manner or the Lessee's indemnification obligations are increased as a result of such failure, in which case, Lessee's obligations shall be released to the extent of such increase. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best commercially reasonable efforts to obtain such severance), ) and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such riskrisk or if such proceedings could result in any criminal liability for an Indemnitee. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, except as otherwise provided herein, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one two percent (1.02.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 6(c) until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 6(c) shall not be paid to Lessee if a Specified Default or Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Documentcontinuing. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Specified Default or Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Specified Default or Lease Event of Default or there shall not be due and owing any such paymentDefault, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

General Indemnity. Lessee Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; or (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease)Engine, (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)Tax, or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (97) in the case of any Pass Through TrusteeTrustee or the Subordination Agent, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) 8) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee Owner or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (129) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense expense that is not reimbursable by Lessee Owner under the Operative Documents, or (1310) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (1511) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (1612) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (1713) any amount that constitutes principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. LesseeOwner's indemnity obligation to an Indemnitee under this Section 6(c6(b) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c6(b) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c6(b). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee Owner pursuant to this Section 6(c6(b) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee Owner an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c6(b) by Lessee Owner to such Indemnitee (less any payments previously made by such Indemnitee to Lessee Owner pursuant to this Section 6(c6(b)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee Owner to make payments to such Indemnitee pursuant to this Section 6(c6(b)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to LesseeOwner; provided that the failure to give such notice shall not affect the obligations of Lessee Owner hereunder except to the extent Lessee Owner is prejudiced by such failure or the LesseeOwner's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expensesexpenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at LesseeOwner's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee Owner shall not be entitled to assume responsibility for and control of of, or participate in or be consulted with respect to any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee Owner shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee Owner with such information reasonably requested by Lessee Owner as is necessary or advisable for Lessee Owner to control or participate in any proceeding to the extent permitted by this Section 6(c6(b). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of LesseeOwner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c6(b). The Lessee Owner shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c6(b). Upon payment of any Expense pursuant to this Section 6(c6(b), LesseeOwner, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee Owner to permit Lessee Owner to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceOwner.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

General Indemnity. Lessee Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; or (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date Equipment Notes (including the Series G Equipment Note and any violation of securities laws or ERISA); or (ESeries C Equipment Note which may be issued under the Indenture) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (including the Class G Pass Through Certificates and any Class C Pass Through Certificates which may be issued under the Class C Pass Through Trust) (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in the future or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease)Engine, (B) in the case of a Note HolderHolder (including any Series G Note Holder and any Series C Note Holder (if any Series C Equipment Note are issued under the Indenture)), the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)Tax, or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (97) in the case of any Pass Through TrusteeTrustee or the Subordination Agent, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement Agreements amounts received and distributable thereunder, or (10) 8) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee Owner or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (129) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense expense that is not reimbursable by Lessee Owner under the Operative Documents, or (1310) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (1511) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (1612) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (1713) any amount that constitutes principal of, or interest or premium on any Equipment Note (including the Series G Equipment Notes, or (18) Note and any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over Series C Equipment Note which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided may be issued under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental RentIndenture). LesseeOwner's indemnity obligation to an Indemnitee under this Section 6(c6(b) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c6(b) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c6(b). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee Owner pursuant to this Section 6(c6(b) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is are not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee Owner an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c6(b) by Lessee Owner to such Indemnitee (less any payments previously made by such Indemnitee to Lessee Owner pursuant to this Section 6(c6(b)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee Owner to make payments to such Indemnitee pursuant to this Section 6(c6(b)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to LesseeOwner; provided that the failure to give such notice shall not affect the obligations of Lessee Owner hereunder except to the extent Lessee Owner is prejudiced by such failure or the LesseeOwner's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expensesexpenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), ) and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at LesseeOwner's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee Owner shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee Owner with such information reasonably requested by Lessee Owner as is necessary or advisable for Lessee Owner to control or participate in any proceeding to the extent permitted by this Section 6(c6(b). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of LesseeOwner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c6(b). The Lessee Owner shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c6(b). Upon payment of any Expense pursuant to this Section 6(c6(b), LesseeOwner, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee Owner to permit Lessee Owner to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceOwner.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against(a) Company assumes liability for, and agrees to shall indemnify, protect, save and keep harmless Operator and its agents, servants, officers, directors, employees, attorneys, affiliates, successors and assigns (each of them an "Indemnitee") from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), and against any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses, including legal expenses, of whatsoever kind and nature, imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (Ai) the executionenforcement of any terms of this Agreement; (ii) the Equipment, delivery and performance of the Operative Documents Units or any part thereof during the period the Equipment or any Unit is in use by or the Pass Through Documents and the transactions contemplated thereby; possession of Company, including, without limitation, with respect thereto, (B1) the manufactureManufacture, design, purchase, acceptance acceptance, nonacceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturerejection, purchaseownership, registration, reregistration, financing, refinancing, ownershipderegistration, delivery, nondelivery, inspection, lease, sublease, assignment, possession, storage, use or non-use, operation, maintenance, testing, repair, overhaul, condition, alteration, modification, alterationaddition, conditionimprovement, storage, replacement, repair, sale, substitution, salereturn, return abandonment, redelivery or other disposition of the Aircraft includingEquipment, without limitationthe Units or any part thereof, (2) any violation claim or penalty arising out of law relating to the Aircraft violations of applicable laws by Company, (including environmental laws), latent or other defects3) tort liability, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) arising out of the offer or sale negligence of any interest Indemnitee (whether active, passive or imputed), (4) death or property damage of passengers, shippers or others, (5) environmental control, noise or pollution, (6) any liens (other than Permitted Liens (as defined in the Trust Estate Loan Agreement)) in respect of the Equipment, the Units or any part thereof and (7) Company's possession or use of the Equipment, any Unit or any part thereof and (iii) any breach of or failure to perform or observe, or any other noncompliance with, any covenant or agreement or other obligation to be performed by Company under this Agreement or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation falsity of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such of Company in this Agreement; provided, however, Company shall not be required to indemnify any Indemnitee for loss or liability arising from acts or events which occur after the Equipment or any Unit has been returned to Operator in the Operative Documents or the Pass Through Documents being incorrectaccordance with this Agreement, or (2) the failure by such Indemnitee to perform for loss or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) liability resulting solely from the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Loan Agreement (PBF Holding Co LLC)

General Indemnity. Lessee agrees, whether or not any of the transactions contemplated hereby agrees shall be consummated, to indemnify each Indemnitee againstindemnify, and agrees to protect, defend, save and keep harmless on an After-Tax Basis each of them Indemnitee from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), and against any and all Expenses Claims that may be imposed on, incurred by or asserted against any Indemnitee, such Indemnitee in any way relating to, based on to or arising out of (Aa) the execution, delivery and performance any of the Operative Documents or the Pass Through Documents and any of the transactions contemplated therebythereby or any investigation, litigation or proceeding in connection therewith, and any amendment, modification or waiver in respect thereof; or (Bb) any Aircraft leased by it or any part thereof or interest therein; or (c) the manufactureacquisition, mortgaging, design, construction, preparation, installation, inspection, delivery, non-delivery, abandonment, acceptance, rejection, purchase, acceptance ownership, possession, rental, lease, sublease, repossession, maintenance, repair, alteration, modification, addition or rejection substitution, storage, transfer of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturetitle, purchaseredelivery, registration, reregistrationuse, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacementsale (including, repairwithout limitation, substitutionany sale or other transfer pursuant to Sections 21, sale22 or 23 of the Lease), return or other disposition of all or any part of any interest in any Aircraft leased by it or the Aircraft imposition of any Lien (or incurring of any liability to refund or pay over any amount as a result of any Lien) thereon, including, without limitation, : (i) Claims or penalties arising from any violation of law relating to the Aircraft or in tort (including environmental lawsstrict liability or otherwise), (ii) any defect in any Aircraft arising from the material or any articles used therein or from the design, testing or use thereof or from any maintenance, service, repair, overhaul or testing of such Aircraft, (iii) latent or other defects, whether or not discoverable, strict tort liability (iv) any Environmental Claims arising from or relating to the construction, use, operation, ownership, maintenance, leasing or redelivery or other transfer of any Aircraft leased by it, (v) the manufacturing of the Aircraft leased by it, and (vi) any claim Claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt infringement relating to the AircraftAircraft leased by it; (d) on the Delivery Date offer, issuance, sale, transfer, conversion or delivery of the Notes or Certificates whether pursuant to Operative Documents or otherwise; (e) the breach by Lessee of any representation or warranty made by it or deemed made by it in any Operative Document; (f) the transactions contemplated hereby or by any other Operative Document, in respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any prohibited transaction described in Section 4975(c) of the Code, or (g) any other agreement entered into or assumed by Lessee or its Affiliates in connection with the Aircraft. Notwithstanding the foregoing provisions of this Section 7.1(a), Lessee shall not be obligated to indemnify an Indemnitee under this Section 7.1(a) for any Claim to the extent that it is attributable to any of the following: (i) Taxes, loss of tax benefits and the cost and expense of tax controversies (whether or not indemnified by Lessee under Section 7.2), other than a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA)payment necessary to make payments under this Section 7.1(a) on an After-Tax Basis; provided, that the foregoing indemnity shall exclusion set forth in this clause (i) does not extend to an Indemnitee with respect apply to any Expense to taxes or penalties included in Claims against which the extent such Expense Indemnitee is attributable to one or more provided an indemnification under clause (f) of the following: this Section 7.1(a); (1ii) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence or willful misconduct of such Indemnitee, Indemnitee or its Affiliates; (4iii) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) breach by such Indemnitee of all or any part of its interest representations and warranties in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen or the breach by an Indemnitee of the United States or its covenants in any Operative Document; (iv) without limiting any other act or omission provision of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to Claim for which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to indemnify such Indemnitee otherwise is determined pursuant to another provision of this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease Agreement or any other Operative Document. Any ; (v) a Certificate Trustee Lien attributable to such amount shall be held Indemnitee; or (vi) a Claim that has been incurred by such Person (Indemnitee because it has engaged in 37 transactions or activities other than those contemplated by this Agreement or any other Operative Document and such Claim would be imposed even if such Indemnitee had not engaged in the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing transactions or activities contemplated by this Agreement or any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceother Operative Document.

Appears in 1 contract

Samples: Participation Agreement (Steelcase Inc)

General Indemnity. Lessee hereby agrees to The Developer shall indemnify each Indemnitee against, and agrees to protect, save and keep harmless each indemnified and other wise hold harmless, the NRDA, its agents and employees, from and against all claims, demands made against and/or loss caused and/or damages suffered and/or cost, charges/expenses incurred to and/or penalty levied and/or any claim due to injury to or death of them from (whether any person and/or loss or not the transactions contemplated herein damage caused or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by suffered to property owned or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating belonging to the Aircraft (including environmental laws)NRDA, latent its agents and employees or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale third party as a result of any interest in the Trust Estate acts, deeds or the Trust Agreement thing done or any similar interest on omitted to be done by Developer or prior to the Delivery Date (including any violation as a result of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee Developer to distribute in accordance with the Trust Agreement perform any amounts distributable by it thereunder, of its obligations under this agreement or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part Developer committing breach of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers terms and conditions of this Agreement or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement on the failure of the Operative DocumentsDeveloper to perform any of its statutory duty and/or obligations or as a consequence of any notice, action, suit or (11) except to the extent fairly attributable to acts proceedings, given initiated, filed or events occurring during the Term commenced by consignee or actions taken (owner of goods or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee vessel owner/agent or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document employees or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, third party or (13) any amount that is an ordinary and usual operating Government Authority or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of any failure or negligence or default of the Owner Participant Developer or the Owner Trusteeits Contractor(s), sub-contractor(s) or employees, servants, agents of such Contractor(s), sub- contractor(s) and/or invitees as the case may be, not being a Citizen in connection with or arising out of this Agreement and/or arising out of or, in connection with the Developer's use and occupation of NRDA's Asset and/or construction, operation and maintenance of the United States Project Without limiting the generality of Article 18.1 the Developer shall fully indemnify and defend NRDA including its officers, servants and agents (the "NRDA Indemnified Persons") from and against any and all loss and damages arising out of or any other act or omission with respect to (a) failure of the Owner TrusteeDeveloper to comply with applicable Laws and Approvals, (b) payments of taxes relating to the Owner Participant Developer, Developers, suppliers and representatives, income or such Indemniteeother taxes required to be Paid by the Developer without reimbursement hereunder, or (15c) any non-payment of amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee due as a result of materials or services furnished to the accrual Developer or payment any of such Expense shall equal its Contractors which are payable by the amount Developer or any of its Contractors. Without limiting the generality of the Expense indemnifiable under provisions of this Section 6(c). If Article 18, the Developer shall fully indemnify, and defend the NRDA Indemnified Persons from and against any Indemnitee shall realize a tax savings and all damages which the NRDA Indemnified Persons may hereafter suffer, or apy by reason of any Tax paid demands, claims, suits or proceedings arising out of claims of infringement of any domestic or foreign patent rights, copyrights or other intellectual property, proprietary or confidentiality rights with respect to any materials, information, design or process used by the Developer or by the Developer's Developers in performing the Developer's obligations or in any way incorporated in or related to the Project. If in any such suit, claim or proceedings, a temporary restraint order or preliminary injunction is granted, the Developer shall make every reasonable effort, by giving a satisfactory bond or otherwise, to secure the suspension of the injunction or restraint order. If, in any such suit claim or proceedings, the Project, or any part, thereof or comprised therein is held to constitute an infringement and its use is permanently enjoined, the Developer shall promptly make every reasonable effort to secure for NRDA license, at no cost to the NRDA, authorizing continued use of the infringing work. If the Developer is unable to secure such license within a reasonable time, the Developer shall, at its own expense and without impairing the specifications and standards either replace the affected work, or part, or process thereof with non- infringing work or parts or process, or modify the same so that it becomes non-infringing. In the event that NRDA receives a claims from a third party in respect of which it is entitled to the benefit of an indemnity under this Article 18 ("Indemnified Party") it shall notify the Developer ("Indemnifying Party") within 14 (fourteen) days of receipt of the claim and shall not settle or pay the claim without the prior approval of the Indemnifying Party, such approval not to be unreasonably withheld or delayed. In the event that the Indemnifying Party wishes to contest or dispute the claim, it may conduct the proceedings in the name of the Indemnified Party subject the Indemnified Party being secured against any costs involved to its reasonable satisfaction. Defense of Claims The Indemnified Party shall have the right, but not the obligation, to contest, defend and litigate any claim, action, suit or proceeding by any third party alleged or asserted against such party in respect of, resulting from, related to or arising out of any matter for which it is entitled to be indemnified hereunder and their reasonable costs and expenses shall be indemnified by Lessee pursuant the Indemnifying Party. If the Indemnifying Party acknowledges in writing its obligation to this Section 6(c) (whether such tax savings shall be by means indemnify the person indemnified in respect of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal loss to the lesser of (i) full extent provided by this Article 18, the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee Indemnifying Party shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expensesoption, to assume responsibility for and control thereofthe defence of such claim, (B) in any judicial action, suit or administrative proceeding involving a claim for one or more Expenses liabilities, payments and other claims related or unrelated obligations at its expense and through counsel of its choice provided it gives prompt notice of its intention to do so to the transactions contemplated Indemnified Party and reimburses the Indemnified Party for the reasonable cost and expenses incurred by the Operative DocumentsIndemnified Party unless the Indemnifying Party provides such security to the Indemnified Party as shall be reasonably required by the Indemnified Party to secure, the loss to assume responsibility for and control of such claim for Expenses be indemnified hereunder to the extent that so compromised or settled. If the same may be and is severed from such other claims (and such Indemnitee shall use Indemnifying Party has exercised its best efforts to obtain such severance)rights under Article 18.2.1, and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee Indemnified Party shall not be entitled to assume responsibility for and control of settle or compromise any such judicial claim, action suit or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, the Indemnifying Party (which consent shall not be unreasonably unreasonable withheld or delayed, unless such Indemnitee waives ). If the Indemnifying Party exercises its rights under Article 18.2.1 then the Indemnified Party shall nevertheless have the right to be indemnified with respect to employ its own counsel and such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or counsel any participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further such action, but the cost and expenses of such counsel shall be subrogated to any claims at the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect expense of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable lawIndemnified Party, interest at the Base Rate plus one percent (1.0%) shall be paidwhen and as incurred, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.unless:

Appears in 1 contract

Samples: License Agreement

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless harmless, on an after- tax basis (which shall mean, for a Relevant Indemnitee, on an After-Tax Basis), each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed PARTICIPATION AGREEMENT (1992 757 [__]) on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the executionOperative Documents, delivery and including any breach by Lessee of its covenants contained therein, or any Sublease under the Lease Agreement, or the performance of the Operative Documents or the Pass Through Documents and any of the transactions contemplated therebythereby or the enforcement of any of the terms thereof; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or PartsEngine; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaulregistration, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer, sale, delivery or transfer of the Loan Certificates, or any other certificates issued pursuant to Sections 18 and 19 hereof whether before or after the Closing Date (the indemnity in this clause (D) to extend also to any person who controls an Indemnitee, its successors, assigns, employees, servants and agents within the meaning of Section 15 of the Securities Act of 1933, as amended); (E) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA)Closing Date; or (EF) the offer transactions contemplated hereby or sale of by any interest other Operative Document, in the Equipment Notes or the Pass Through Certificates (or other evidence respect of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation application of securities laws or Parts 4 and 5 of Subtitle B of Title I of ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being materially incorrect, or (2) the failure by such Indemnitee to perform or observe in any of its agreementsmaterial respect any agreement, covenants covenant or conditions condition in any of the Operative Documents including, without limitation, the creation or existence of a Lessor Lien (including for this purpose Liens that would be Lessor Liens but for the Pass Through Documentsproviso to the definition of Lessor Liens) or a Loan Participant Lien, or (3) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (other than gross negligence imputed to such Indemnitee solely by reason of its interest in the Aircraft), or (4) (A) in a disposition by the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee Owner Trustee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (Bi) in the case of each Indemnitee, Section 9 or 19 of the Lease Agreement or as a Note Holderconsequence of an Event of Loss and (ii) in the case of an Indemnitee which is the Owner Participant, Section 8, 10 or 15 of the offerLease Agreement), sale or other a disposition (voluntary or involuntary) by such Note Certificate Holder of all or any part of its interest in any Equipment Note Loan Certificate (other than as contemplated by the Trust Indenture) or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee PARTICIPATION AGREEMENT (1992 757 [__]) of all or any part of such Indemnitee's interest in the Airframe, any Engine or in the Operative Documents, in each case other than during the continuance of an Event of Default under the Lease Agreement, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), other than amounts necessary to make any payment hereunder on an After-Tax Basis or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Closing Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k)interest, or (7) in the case of the Owner Trustee and the Mortgagee, in its their individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts received and distributable by it thereunder, thereunder or a failure (8) in except where and to the case extent such failure arises by virtue of the Indenture Trustee in its individual and trust capacities, failure any legal restriction or restraint) on the part of the Indenture Trustee Mortgagee to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) 8) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned required by a specific requirement the terms of the Operative DocumentsDocuments (provided that Lessee shall have no liability for any indemnity hereunder in respect of any amendment, waiver, supplement or consent required by the terms of the Operative Documents which results from an action of any Indemnitee that is not required under the terms of the Operative Documents unless the same is requested by the Lessee) or (9) any loss of tax benefits or increase in tax liability under any tax law whether or not Lessee is required to indemnify therefor pursuant to this Agreement or the Tax Indemnity Agreement (it being understood that Section 7(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes) other than amounts necessary to make any payment hereunder on an After-Tax Basis, or (10) the offer, sale or delivery of a Loan Certificate or any interest in the Trust Estate or Trust Agreement by an Indemnitee in violation of the Securities Act of 1933, as amended; or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Termprior thereto, actions taken (or required to be taken and not taken) acts or events occurring which occur after the earlier earliest of: (I) the return of possession of the Aircraft Airframe or any Engine or any Part to the Owner Trustee or its designee pursuant to the terms of the Lease Agreement (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15-42- PARTICIPATION AGREEMENT (1992 757 [__]), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Participation Agreement (United Air Lines Inc)

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General Indemnity. Lessee (i) Subject to the exclusions stated in (b) below and the other limitations in this Section 8, the Borrower hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them them, on an After-Tax Basis, from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or Indemnitee arising out of or directly resulting from (A) the executionoperation, delivery and performance possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale of the Operative Documents Designated Aircraft, Airframe or any Engine, or any engine used in connection with any associated Airframe or any part of any of the Pass Through Documents foregoing by the Borrower, any lessee or any other Person whatsoever, whether or not such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale is in compliance with the terms of the Mortgage, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any person whatsoever and the transactions contemplated therebyclaims relating to any laws, rules or regulations pertaining to such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, sale or return including environmental control, noise and pollution laws, rules or regulations; (B) the manufacture, design, purchase, acceptance acceptance, rejection, delivery, or rejection condition of the Designated Aircraft, Airframe or any Engine or Parts; (C) the Aircraft (Engine, any engine used in connection with any Airframe, or any portion thereof) or part of any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft foregoing including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or and other defects, whether or not discoverable, strict tort liability and any claim for patent, or trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense infringement to the extent the Borrower has [**] — Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. claims against the Aircraft Manufacturer or Engine Manufacturer for such Expense is attributable to one or more of the following: amounts; (1C) any representation breach of or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe observe, or any of its agreementsother noncompliance with, covenants any covenant or conditions in any agreement to be performed, or other obligation of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of Borrower under any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts falsity of any representation or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession warranty of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and Borrower in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms any of the Operative Documents Documents; (D) the offer, sale and delivery by the Borrower or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under anyone acting on behalf of the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense Borrower of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), Loan Certificates or (14) any amounts relating to the deregistration successor debt obligations issued in connection with the FAA refunding or refinancing thereof (including, without limitation, any claim arising out of the Aircraft as a result Securities Act of the Owner Participant or the Owner Trustee1933, as amended, the case may beSecurities Exchange Act of 1934, not being a Citizen of the United States as amended, or any other act Federal or omission of state statute, law or regulation, or at common law or otherwise relating to securities) (the Owner Trustee, the Owner Participant or such indemnity provided in this clause (D) to extend also to any Person who controls an Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documentsits successors, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documentsassigns, or (17) principal ofemployees, or interest or premium on the Equipment Notesdirectors, or (18) any prohibited transactionofficers, servants and agents within the meaning of Section 406 of ERISA or Section 4975(c)(1) 15 of the Code, occurring with respect to the purchase or holding Securities Act of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when1933, as if, amended); and to the extent, realized or (iiE) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative DocumentsDocuments or any Lease under the Mortgage for the Designated Aircraft, to assume responsibility any Event of Default under the Mortgage for and control the Designated Aircraft or the enforcement against the Borrower of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien terms thereof (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lesseeincluding, without any further actionlimitation, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect Article IX of such Expense pursuant to this Section 6(cMortgage)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Facility Agreement (Hawaiian Holdings Inc)

General Indemnity. Lessee The Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements, of whatsoever kind and nature (collectively called "Expenses") imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any lease or sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Liquidity Provider, the Intercreditor Agreement and the transactions contemplated thereby; Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; infringement or (D) the offer offer, sale or sale delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any interest in person who controls an Indemnitee within the Trust Estate or meaning of Section 15 of the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation Securities Act of securities laws or ERISA1933, as amended); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the Pass Through Documents Trust Agreements or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the Pass Through DocumentsTrust Agreements applicable to it including, without limitation, the creation or existence of a Loan Participant Lien or an Indenture Trustee's Lien (except to the extent such failure was caused directly by the failure of the Owner to perform any obligation under an Owner Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its such Indemnitee's interest in the Airframe or Airframe, any Engine (or in the Operative Documents other than during the continuance of a Lease an Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of under the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTrust Indenture, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee the Owner is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and provides for the Tax Indemnity Agreement exclusively provide for LesseeOwner's liability with respect to Taxes), or (6F) in the case of the Owner an Indemnitee which is a Loan Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate a Certificate Holder or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or Indenture Trustee (7) in the case of the Owner Trustee in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Indenture Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10G) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsother than such as have been consented to, supplementsapproved, waivers authorized or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsOwner, or (11H) except subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not the Owner is required to indemnify therefor pursuant to this Agreement, or (I) any Expense which is specified to be for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under any Operative Document, or (J) as to any Indemnitee the funding of such Indemnitee's participation in the transaction contemplated by the Operative Documents giving rise to a "prohibited transaction" within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA. The foregoing indemnity shall not extend to any Expense to the extent fairly attributable that such Expense is not caused by, or does not arise out of, an act, omission or event which occurs prior to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 Lien of the Lease, (III) Trust Indenture and the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Owner under the Operative Documents. The Owner further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the account of an Indemnitee by the Owner Trusteepursuant to this Section 7(c), such Indemnitee subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to the Owner, but only if the Owner Participant or such Indemnitee, or (15) any amounts attributable shall have made all payments then due and owing to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraftsentence. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to Lesseethe Owner; provided that the failure to give provide such notice shall not affect release the Owner from any of its obligations to indemnify hereunder, and no payment by the Owner to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to any right or remedy which the extent Lessee is prejudiced by Owner may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give the Owner such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee the Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate Collateral or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee the Owner with such information reasonably requested by Lessee the Owner as is necessary or advisable for Lessee the Owner to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee Owner shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When the Owner or the insurers under a policy of insurance maintained by the Owner (or any Lessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of the Owner or such insurers, provided that no such defense shall be compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee's prior consent. In the case of any Expense indemnified by the Owner hereunder which is covered by a policy of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, Lesseethe Owner or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 of the Trust Indenture. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Owner or the insurers to permit Lessee the Owner or the insurers to pursue such claims, if any, to the extent reasonably requested by Lesseethe Owner or the insurers. If In the event that the Owner shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to the Owner an amount equal to the amount of such reimbursement (but in no event more than such payment from the Owner) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, provided that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse the Owner if the Owner has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from the Owner under any of the Operative Documents. The Owner's obligations under the Lease indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other Operative Document. Any such amount shall be held by such document or instrument, and the Person (seeking indemnification from the Lessee hereby granting a security interest in such amount Owner pursuant to such Person) and, if a Lease Event any provision of Default shall have occurred and be continuing, shall be applied this Agreement may proceed directly against Lessee's obligations hereunder the Owner without first seeking to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing enforce any such Lease Event other right of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceindemnification.

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Holdings Corp/Pred)

General Indemnity. Lessee Owner hereby agrees to indemnify indemnify, on an after-tax basis, each Indemnitee against, and agrees to protect, save and keep harmless and shall pay on demand each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents or the Pass Through Trust Agreements are consummated), any and all Expenses and Taxes imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the executionOperative Documents and any Permitted Lease, delivery and performance or the enforcement of any of the Operative Documents terms of any thereof; or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, design, purchase, resale, acceptance or rejection of the Airframe or any Engine or Parts; or (C) the Aircraft (or any portion thereof) or any engine Engine whether or not installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, possession, storageuse, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, sale, replacement, repair, substitution, saledisposition, return registration, reregistration or other disposition airworthiness of the Aircraft (or any portion thereof) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any damage to property or the environment, death or injury to any person and any claim for patent, trademark or copyright infringement; or (D) the offer offer, sale, holding, transfer or sale delivery of any interest in the Trust Estate Equipment Notes or the Trust Agreement or any similar interest Pass Through Certificates, whether before, on or prior to after the Delivery applicable Issuance Date (including the indemnity in this clause (D) to extend also to any violation person who controls an Indemnitee, its successors, assigns, employees, directors, officers, servants and agents within the meaning of securities laws or ERISASection 15 of the Securities Act of 1933, as amended); or (E) the offer Pass Through Documents and each Pass Through Trust Agreement (and any amendments thereto), or sale the enforcement of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including of any violation of securities laws or ERISA)thereof; provided, with respect to an Indemnitee, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.:

Appears in 1 contract

Samples: Participation Agreement (United Air Lines Inc)

General Indemnity. The Lessee agrees, whether or not any of the transactions contemplated hereby agrees shall be consummated and whether or not the Facility Lease, any other Transaction Document or any Financing Document shall have expired or have been terminated, to indemnify each Indemnitee againstassume liability for, and agrees the Lessee does hereby agree to indemnify, protect, defend, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated)Indemnitee, on an After-Tax Basis, tram and against, any and all Expenses claims which may be imposed on, incurred by or asserted against any Indemnitee, Indemnitee (whether because of act or omission by such Indemnitee or otherwise and whether or not such Indemnitee shall also be indemnified as to any such Claim by any other Person) in any way relating to, based on to or arising out of (Ai) Xxxx 0, the Undivided Interest, the Real Property Interest, PVNGS or the PVNGS Site, or any part of -63- 6091.100.2898.27A:9 any thereof (or any beneficial interest therein) , any ANPP Project Agreement, the issuance or payment of the Bonds or the Notes, this Participation Agreement or any other Transaction Document or any Financing Document (including, without limitation, the performance or enforcement of any of the obligations and terms hereunder or thereunder), (ii) a disposition of all or any part of the Undivided Interest, the Real Property Interest, Unit 2 or any other interest of the Owner Trustee or Owner Participant in connection with any termination of the Facility Lease, or (iii) the executiondesign, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, financing, erection, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufactureacceptance, purchase, registration, reregistration, financing, refinancingrejection, ownership, acquisition, delivery, nondelivery, inspection, lease, sublease, preparation, installation, repair, transfer of title, abandonment, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return return, storage, disposition, or other disposition decommissioning (including, but without limitation, with respect to the Termination Obligation) of the Aircraft Undivided Interest, Unit 2, the Real Property Interest, any Capital Improvement, the PVNGS Site, any other facilities on the PVNGS Site or any other interest of the Owner Trustee or Owner Participant in any thereof or any accident, nuclear incident or extraordinary nuclear occurrence in connection therewith (including, without limitation, (A) claims or penalties arising from any violation of law relating or liability in tort (strict or otherwise) or from the active or passive negligence of any Indemnitee, (3) loss of or damage to any property or the Aircraft environment or death or injury to any Person, (including environmental laws), C) latent or and other defects, whether or not discoverable, strict tort liability and (D) any claim for patent, trademark trademark, service-xxxx or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or infringement and (E) the offer or sale any claim of any interest Indemnitee incurred in the Equipment Notes administration of this Participation Agreement, any other Transaction Document or any Financing Document and not paid as Transaction Expenses or included in Facility Cost and, if not included in Transaction Expenses, the Pass Through Certificates (or reasonable fees and disbursements of counsel and other evidence of the debt relating to the Aircraft) on the Delivery Date or professionals incurred in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISAtherewith); provided, however, that the foregoing indemnity Lessee shall not extend be required to an indemnify any Indemnitee pursuant to this Section 13(a), (1) for any Claim in respect of Xxxx 0, the Undivided Interest or the Real Property Interest arising from acts or events not attributable to the Lessee which occur after redelivery of the Undivided Interest to the Owner Trustee in accordance with respect to any Expense Section 5 of the Facility 6091.100.2898.27A:9 Lease, except to the extent such Expense is attributable to one expressly provided in any Transaction Document, the ANPP Participation Agreement or more any other agreement or undertaking of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrectLessee, or (2) the failure by for any Claim against such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) resulting solely from acts which would constitute the willful misconduct or the gross negligence of such IndemniteeIndemnitee (unless imputed to such Indemnitee by reason of Xxxx 0, the Undivided Interest, the Real Property Interest, PVNGS, the PVNGS Site or any other facilities at the PVNGS Site or any occurrence in connection with any thereof), (3) for any Transaction Expense to be paid by the Owner Trustee pursuant to Section 14(a) or (4) (A) in for any Claim resulting solely from a transfer by the case of any Indemnitee, Owner Trustee or the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee Owner Participant of all or any part of its interest in the Airframe Facility Lease, Xxxx 0, the Real Property Interest or the Undivided Interest other than in connection with any early termination of the Facility Lease or any Engine exercise of remedies under Section 16 thereof or the transfer contemplated by Section 7(b) (other than during 4) or the continuance of a Lease Event of Default or pursuant first transfer by the Owner Participant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case an Affiliate of the Owner Participant. To the extent that an Indemnitee in fact receives indemnification payments from the Lessee under the indemnification provisions of this Section 13(a), the offer Lessee shall be subrogated, to the extent of such indemnity paid, to such Indemnitee's rights with respect to the transaction or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate event requiring or the Trust Agreement or any similar interest except during the continuance of an Event of Default giving rise to such indemnity, but only so long as such disposition is made in accordance with Section 7(k), or (7) in subrogation shall not materially adversely affect the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part rights of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission Indemnitee hereunder. Nothing herein contained shall be construed as constituting a guaranty by the Lessee of the Owner Trustee, the Owner Participant principal of or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excesspremium, if any, of or interest on the amount described in clause (i) over Notes or the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes Bonds or of the residual value or useful life of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceUndivided Interest.

Appears in 1 contract

Samples: Participation Agreement (Public Service Co of New Mexico)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements (including reasonable legal fees and expenses and Transaction Expenses to the extent not required to be paid by the Owner Trustee or the Owner Participant pursuant to Section 16 hereof but excluding internal costs and expenses such as salaries and overhead), of whatsoever kind and nature (collectively called "Expenses") imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any sublease or sub-sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Liquidity Provider, the Intercreditor Agreement and the transactions contemplated thereby; Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; , (D) the offer, sale or delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any person who controls an Indemnitee within the meaning of Section 15 of the Securities Act of 1933, as amended) or (E) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest with respect to the Aircraft on or prior to the Delivery Date (including any violation of securities laws or ERISA)Date; or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the Pass Through Documents Trust Agreements or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities or the Pass Through DocumentsTrust Agreements applicable to it including, without limitation, the creation or existence of a Lessor Lien (including for this purpose Liens which would be Lessor Liens but for the proviso in the definition of Lessor Liens), a Loan Participant Lien or an Indenture Trustee's Lien (except to the extent such failure was caused directly by the failure of Lessee to perform any obligation under a Lessee Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in with respect to the case of any IndemniteeOwner Trustee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee the Owner Trustee of all or any part of its interest in the Airframe or any Engine (other than during as contemplated by the continuance of a Lease Event of Default or pursuant the Trust Indenture) or with respect to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Airframe, any Engine or in the Operative DocumentsDocuments other than during the continuance of an Event of Default under the Lease, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6F) in the case of an Indemnitee which is the Owner Participant or the Owner Trustee (in its individual or trust capacity) (other than in connection with an Event of Default) or, in connection with an exercise of remedies under the Trust Indenture upon a default thereunder (other than a default under Section 4.02(a) of the Trust Indenture), the Indenture Trustee or a Loan Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k)interest, or (7G) in the case of an Indemnitee which is the Owner Participant or the Owner Trustee (in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to use ordinary care to distribute in accordance with the Trust Agreement any amounts received and distributable by it thereunder, or (8) and in the case of an Indemnitee which is a Loan Participant, a Certificate Holder or the Indenture Trustee (in its individual or trust capacity) and trust capacitiesthe affiliates, successors and assigns thereof, a failure on the part of the Indenture Trustee to use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10H) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsother than such as have been consented to, supplementsapproved, waivers authorized or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsLessee, or (11I) subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not Lessee is required to indemnify therefor pursuant to this Agreement or the Tax Indemnity Agreement, or (J) except to the extent fairly attributable to acts, omissions or events occurring prior thereto, acts or events occurring during which occur with respect to the Term Airframe, any Engine or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring any Part after the earlier earliest of: (I) the return of possession of the Aircraft Airframe or such Engine or Part to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15)Lease, (II) the termination of the Term Lease in accordance with Section 9 or Section 19 thereof or (III) the commencement of storage pursuant to Section 5(d) of the Lease, or (IIIK) the payment by Lessee of all amounts required any Expense which is specified to be paid for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under the Lease following an Event of Loss any Operative Document, or (IVL) as to any Indemnitee the funding of such Indemnitee's participation in the transaction contemplated by the Operative Documents giving rise to a "prohibited transaction" within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA. The foregoing indemnity shall not extend to any Expense to the extent that such Expense is not caused by, or does not arise out of, an act, omission or event which occurs prior to the termination of the Lease and the payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents. Lessee further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the Owner Trusteeaccount of an Indemnitee by Lessee pursuant to this Section 7(c), the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to remove pursuant Lessee, but only if Lessee shall have made all payments then due and owing to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an such Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c))sentence. Nothing in this Section 6(c7(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes Secured Certificates or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, give notice of such claim to Lessee; provided that the failure to give provide such notice shall not affect release Lessee from any of its obligations to indemnify hereunder, and no payment by Lessee to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of any right or remedy which the obligations of Lessee hereunder except to the extent Lessee is prejudiced by may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give Lessee such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as Lessee has agreed in a writing acceptable to such Indemnitee that Lessee is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as Lessee has agreed in a writing acceptable to such Indemnitee that Lessee is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate or the Trust Estate or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When Lessee or the insurers under a policy of insurance maintained by Lessee (or any Sublessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of Lessee or such insurers, provided that no such defense shall be compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee's prior consent. In the case of any Expense indemnified by Lessee hereunder which is covered by a policy of insurance maintained by Lessee (or any Sublessee) pursuant to Section 11 of the Lease or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by Lessee (or any Sublessee) pursuant to Section 11 of the Lease or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, LesseeLessee or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 or 7.01 of the Trust Indenture or Section 5.03 or 7.01 of the Trust Agreement. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee or the insurers to permit Lessee or the insurers to pursue such claims, if any, to the extent reasonably requested by LesseeLessee or the insurers. If In the event that Lessee shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to Lessee an amount equal to the amount of such reimbursement (but in no event more than such payment from Lessee) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, provided that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse Lessee if Lessee has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from Lessee under any of the Lease or any other Operative DocumentDocuments. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such under the indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person as and when due (and, indemnified shall also be indemnified with respect to the extent that same matter under the terms of any other document or instrument, and the Person seeking indemnification from Lessee has no obligations hereunder pursuant to any provision of this Agreement may proceed directly against Lessee without first seeking to enforce any other right of indemnification. Lessee agrees to pay the reasonable fees and expenses of the Indenture Trustee and the Owner Trustee for acting as such, other than such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due fees and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceexpenses which constitute Transaction Expenses.

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Holdings Corp/Pred)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Certificate Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Certificate Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 belowCode) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person person or Persons persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of of, or participate in or be consulted with respect to any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

General Indemnity. Subject to the other provisions of this Section 10.3, Lessee hereby agrees to pay, defend and indemnify and hold Lessor, Trust Company, Lenders, the Administrative Agent, Collateral Agent and Certificate Holders and their respective Affiliates, successors and assigns (including any consolidated or combined group of which any such Person is a member) (each Indemnitee against, and agrees to protect, save and keep a "Tax Indemnitee") harmless each of them on an After-Tax Basis from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses Federal, state, local and foreign taxes, excise taxes, fees, withholdings, levies, documentary stamps imposts, duties, assessments, penalties and charges of any kind and nature whatsoever, together with any penalties, fines or interest thereon (herein called "Taxes") howsoever imposed, whether levied or imposed on, incurred by upon or asserted against any a Tax Indemnitee, Lessee, any Item of Equipment, or any part thereof, by any federal, state or local government or taxing authority in the United States, or by any way relating totaxing authority of a foreign country or subdivision thereof, based on upon or arising out of with respect to (Aa) the executionItems of Equipment, delivery and performance any Item of the Operative Documents Equipment or the Pass Through Documents and the transactions contemplated thereby; any part thereof, (Bb) the manufacture, purchaseconstruction, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufactureordering, purchase, registration, reregistration, financing, refinancingtransfer, ownership, transfer of ownership, titling or re-titling, registration or re-registration, delivery, nondeliveryleasing, inspection, lease, subleasesubleasing, possession, storage, use or non-use, operation, maintenance, overhaulstorage, modificationremoval, alterationreturn, conditionmortgaging, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale granting of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation in, transfers of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); providedtitle to, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offeracquisition, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9licensing, 10documentation, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offerrepossession, sale or other acquisition or disposition (voluntary or involuntary) by such Note Holder of all the Items of Equipment, any Item of Equipment or any part thereof, (c) the revenues, rent, receipts or earnings arising from any Item of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in thereof, (d) any Operative Document, (e) any Lease Payment, Availability Fee or Supplemental Payment or any payment made to a Lender by Lessor, Lessee, Certificate Holders or Trust Company pursuant to the Operative Documents, or (5f) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with otherwise in respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document thereof or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, transaction or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial hereby or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentencethereby.

Appears in 1 contract

Samples: Participation Agreement (Universal Compression Inc)

General Indemnity. Lessee Subject to the next following paragraph, ----------------- the Borrower hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or Indemnitee arising out of or directly resulting from (Ai) the executionoperation, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacturepossession, purchaseuse, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturemaintenance, purchaseoverhaul, testing, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspectionnon-delivery, lease, subleasenonuse, modification, alteration, or sale of any Aircraft, Airframe or Engine, or any engine used in connection with any Airframe or any part of any of the foregoing by the Borrower, any lessee or any other Person whatsoever, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any person whatsoever and claims relating to any laws, rules or regulations pertaining to such operation, possession, storage, use or non-use, operation, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, conditionsale or return including environmental control, replacementnoise and pollution laws, repairrules or regulations; (ii) the manufacture, substitutiondesign, salepurchase, return acceptance, rejection, delivery, or other disposition condition of any Aircraft, Airframe or Engine, any engine used in connection with any Airframe, or any part of any of the Aircraft foregoing including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or and other defects, whether or not discoverable, strict tort liability and any claim for patent, or trademark or copyright infringement; (Diii) any breach of or failure to perform or observe, or any other noncompliance with, any covenant or agreement to be performed, or other obligation of the offer Borrower under any of the Operative Documents, or sale the falsity of any interest representation or warranty of the Borrower in any of the Operative Documents; (iv) assuming the Loan Participants are making Drawings in the Trust Estate ordinary course of their business for their own accounts, the offer, sale and delivery by the Borrower or anyone acting on behalf of the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale Borrower of any interest in the Equipment Notes Loan Certificates or the Pass Through Certificates (or other evidence of the successor debt relating to the Aircraft) on the Delivery Date or obligations issued in connection with a the refunding or refinancing thereof (including, without limitation, any claim arising out of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any other federal or state statute, law or regulation, or at common law or otherwise relating to securities (collectively "Securities Liabilities")) (the indemnity ---------------------- provided in accordance with this clause (iv) to extend also to any Person who controls an Indemnitee, its successors, assigns, employees, directors, officers, servants and agents within the meaning of Section 15 of the Securities Act of 1933, as amended); and (v) the transactions contemplated by the Operative Documents, any Event of Default under the Mortgage or the enforcement against the Borrower of any of the terms hereof thereof (including any violation including, without limitation, Article V of securities laws or ERISAthe Mortgage); provided, that the . The foregoing indemnity shall not extend to an Indemnitee with respect to any Expense of any Indemnitee to the extent such Expense is attributable to one or more of the following: (1) any representation acts or warranty by omissions involving the willful misconduct or gross negligence of such Indemnitee or any Person acting on behalf of such Indemnitee (other than gross negligence imputed to such Indemnitee solely by reason of its interest in the Operative Documents or the Pass Through Documents being incorrect, or an Aircraft); (2) any Tax, or increase in tax liability under any tax law (such matter being subject to the failure by such Indemnitee indemnity in Section (c) hereof); provided, however, that this clause (2) shall not apply to perform (A) taxes taken into consideration in making any payments on an after-tax basis or observe (B) any license, documentation, registration or filing fees imposed upon or in connection with the execution, delivery, registration or filing of its agreementsthis Agreement, covenants or conditions in any of the Operative Documents a Loan Certificate or the Pass Through Documents, Mortgage as contemplated in Section 12(iii) hereof; or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Security Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement Mortgage any amounts received and distributable by it thereunder, . The Borrower further agrees that any payment or (10indemnity pursuant to this Section 8(a) the authorization or giving or withholding in respect of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor "Expense" shall be entitled to exercise remedies under such Section 15)in an amount which, (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee after deduction of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts Taxes required to be paid by Lessee pursuant such recipient with respect to such payment or indemnity under the terms laws of any federal, state or local government or taxing authority in the Operative Documents United States, or (12) under the laws of any amount which any Indemnitee expressly agrees to pay under any Operative Document taxing authority or governmental subdivision of a foreign country, or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, territory or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act or omission of the Owner Trusteeinternational authority, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of (A) the amount described of such Expense over (B) the net reduction in clause (i) over Taxes required to be paid by such recipient resulting from the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations accrual or payment of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the AircraftExpense. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lesseethe Borrower; provided that the failure to give provide such notice shall not affect release the Borrower from any of its obligations of Lessee to indemnify hereunder except to the extent Lessee that the Borrower is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of the failure to give such failurenotice, and no payment by the Borrower to an Indemnitee pursuant to this Section 8(a) shall be deemed to constitute a waiver or release of any right or remedy which the Borrower may have against such Indemnitee for any actual damages as a result of the failure by such Indemnitee to give the Borrower such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Borrower shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, so long as the Borrower has acknowledged in writing its responsibility for such Expense hereunder (unless such Expense is covered by the second paragraph of this Section 8(a), except that such acknowledgment does not apply if the decision of a court or arbitrator provides that the Borrower is not liable hereunder), (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best reasonable efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lesseethe Borrower's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Borrower pursuant to the preceding provisions. Notwithstanding any of the foregoing, the Borrower shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if any Event of Default shall have occurred and be continuing, if such proceedings will involve a material risk of the sale, forfeiture or loss of an Aircraft unless the Borrower shall have posted a bond or other security reasonably satisfactory to the relevant Indemnitee with respect to such risk or if such proceedings could entail any risk of criminal liability being imposed on such Indemnitee. The affected Indemnitee shall supply Lessee the Borrower with such information reasonably requested by Lessee the Borrower as is necessary or advisable for Lessee the Borrower to control or participate in any proceeding to the extent permitted by this Section 6(c8(a). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Borrower, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c8(a). The Lessee Borrower shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c8(a). Upon Notwithstanding any other provision of this Section 8(a) to the contrary, in the case of any Expense indemnified by the Borrower hereunder which is covered by a policy of insurance maintained by the Borrower, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such claim as may be required to retain the benefits of such insurance with respect to such claim. To the extent of any payment of any Expense pursuant to this Section 6(c8(a), Lesseethe Borrower, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Borrower to permit Lessee the Borrower to pursue such claims, if any, to the extent reasonably requested by Lesseethe Borrower. If In the event that the Borrower shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 8(a), and such Indemnitee subsequently shall be reimbursed in whole or in partrespect of such indemnified amount from any other Person, with respect to any Expense paid by Lessee hereunder, it will such Indemnitee shall promptly pay the Borrower the amount refundedof such reimbursement, including interest received thereto (but not an amount in excess of the amount Lessee attributable thereto, provided that no Default or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Credit Agreement (Midway Airlines Corp)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person person or Persons persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Lessee Documents, the Pass Through Trust Agreement or any other Operative Documents to which Lessee is a party are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions Transactions contemplated hereby and thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or use, non-use, operation, maintenance, overhaul, testing, modification, alteration, condition, replacement, repair, substitution, sale, return transfer, return, or other disposition of the Aircraft Aircraft, Airframe, Engine(s) (or any engine used on the Airframe) or any Part or part used on the Aircraft, the Airframe or any Engine (or any engine used on the Airframe) by Lessee, any Sublessee or any other Person including, without limitation, any violation of law relating to the Aircraft (including environmental and noise pollution laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Aircraft, the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA)) and any Lien relating to or arising during such period; or (E) the offer offer, sale or sale delivery of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); and (F) the Transactions contemplated by the Lessee Documents, the Pass Through Trust Agreement and the other Operative Documents to which the Lessee is a party; provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable directly related to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect (except to the extent such representation or warranty was based on a Lessee representation or warranty which was incorrect), or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe Airframe, any Engine or any Engine Part (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 15, 19 or 19 20 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, except to the extent such offer, sale or other disposition is made while a Lease Event of Default has occurred and is continuing and in accordance with the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer offer, sale or sale other disposition by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during to the continuance of an extent such offer, sale or other disposition is made (A) while a Lease Event of Default so long as such disposition has occurred and is made continuing and (B) in accordance with Section 7(k7(j), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement Agreements amounts received and distributable thereunder, or (10) the authorization or authorization, giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or Lessee, (b) are not occasioned by a specific requirement of the Operative Documents, and (c) are not entered into in connection with the exercise of remedies pursuant to Section 15 of the Lease while a Lease Event of Default has occurred and is continuing or (11) except to the extent fairly attributable to acts or events occurring occurring, or circumstances or conditions existing, during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee (including the placement in storage pursuant to the terms Section 5 of the Lease (other than Lease) pursuant to and in accordance with the terms of the Lease unless and to the extent an Expense is directly related to actions, omissions or events occurring in connection with the exercise of remedies under Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15)of the Lease while a Lease Event of Default has occurred and is continuing, (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease and the other Operative Documents following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, other than during the continuance of a Lease Event of Default when the Lease has been duly declared (or deemed declared) in default and the Owner Trustee is exercising remedies thereunder seeking to dispossess Lessee of its interest in the Aircraft or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, Notes or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity indemnity, such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). No Indemnitee shall have any obligation to make any such payment while a Lease Event of Default has occurred and is continuing. Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure to give notice in a timely manner or the Lessee's indemnification obligations are increased as a result of such failure, in which case, Lessee's obligations shall be released to the extent of such increase. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best commercially reasonable efforts to obtain such severance), ) and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such riskrisk or if such proceedings could result in any criminal liability for an Indemnitee. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, except as otherwise provided herein, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one two percent (1.02.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 6(c) until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 6(c) shall not be paid to Lessee if a Specified Default or Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Documentcontinuing. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Specified Default or Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Specified Default or Lease Event of Default or there shall not be due and owing any such paymentDefault, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Participation Agreement (Us Airways Inc)

General Indemnity. Lessee hereby Borrower assumes liability for, and agrees to indemnify each Indemnitee against, and agrees on written demand to protectpay, save and keep harmless or to reimburse each of them from (whether or not Indemnitee for the transactions contemplated herein or in any of the other Operative Documents are consummated)payment of, any and all Expenses liabilities, obligations, losses, damages, penalties, claims (including claims involving strict liability in tort), suits, actions, costs, expenses, and disbursements, including legal fees and expenses, of whatsoever kind and nature (collectively, "Liabilities") imposed on, incurred by by, or asserted against any Indemnitee, in any way Indemnitee relating to, based on to or arising out of (A) any Basic Document, the execution, delivery and performance enforcement against Borrower of any of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection terms of the Airframe Basic Documents, or any Engine lease or Parts; (C) relinquishment of possession of the Aircraft (or any portion thereof) part thereof or any engine installed on action or inaction of Borrower or of any lessee, assignee, or transferee of Borrower in connection therewith, the Airframe or any airframe on which an Engine is installed whether or not arising out purchase of the manufactureAircraft under the Purchase Agreement, purchasethe ownership of the Aircraft, registration, reregistration, financing, refinancing, ownershipthe acquisition, delivery, nondelivery, inspectionacceptance, nonacceptance, rejection, registration, deregistration, insuring, storage, manufacture, assembly, transportation, importation, exportation, maintenance, condition, modification, testing, repair, fitness for use, merchantability, sale, abandonment, lease, sublease, assignment, transfer, transfer of title, possession, storagerepossession, use or non-use, operation, maintenancereturn, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other application or disposition of the Aircraft includingor any component thereof, without limitationthe condition upon return thereof after repossession following the occurrence of an Event of Default or following the exercise of remedies under the Mortgage, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability loss of or damage to any property or the environment, death or injury of any person, and any claim for patent, trademark trademark, copyright, or copyright infringement; (D) mask work infringement and the offer violation or sale infringement by Borrower of any interest in the Trust Estate laws, rules, or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); regulations, or (E) the offer or sale of without limiting any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraftforegoing) any breach by Borrower of, noncompliance by Borrower with, or misrepresentation made or deemed made by or on the Delivery Date behalf of Borrower in, under, or in connection with a refinancing the Purchase Agreement or any Purchase Agreement Assignment or any warranty, certificate, or agreement made or delivered in, under, or in accordance connection with the terms hereof (including Purchase Agreement or any violation of securities laws or ERISA)Purchase Agreement Assignment; provided, that the foregoing indemnity this section shall not extend require Borrower to an pay or indemnify any Indemnitee with respect to under this section (i) for any Expense Liability to the extent such Expense is attributable to one or more resulting from its acts of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence or willful misconduct; (ii)for any Taxes (Borrower's duties in respect of such Indemnitee, or (4) (A) Taxes being set forth in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not takensection 9.02) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee for any cost or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA preparation, execution, delivery, or enforcement of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Basic Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. LesseeBorrower's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid duties in respect of such Expense pursuant to this Section 6(ccosts and expenses being set forth in section 11.03); (iii) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on for any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which Liability that such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, Indemnitee incurs to the extent that Lessee has no obligations hereunder to such Personresulting from its breach of any of its representations, such amount shall be paid to Lessee). At such time as there shall not be continuing warranties, or covenants in any such Lease Event of Default or there shall not be due and owing Basic Document; (iv) for any such payment, such amount shall be paid to Lessee Liability to the extent resulting from a claim against such Indemnitee not previously applied in accordance with the immediately preceding sentence.related to any Aircraft, any action or inaction of Borrower or any lessee, assignee, or transferee of Borrower, or any

Appears in 1 contract

Samples: Credit Agreement (Asa Holdings Inc)

General Indemnity. Without limitation on the rights of any Indemnitee under Article VI of the Construction Agency Agreement, Lessee agrees, whether or not any of the transactions contemplated hereby agrees shall be consummated, to indemnify each Indemnitee againstindemnify, and agrees to protect, defend, save and keep harmless each of them Indemnitee from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), and against any and all Expenses Claims that may be imposed on, incurred by or asserted against such Indemnitee, whether or not such Indemnitee shall also be indemnified as to any Indemniteesuch Claim by any other Person, whether or not such Claim is covered by the indemnification at Article VI of the Construction Agency Agreement and whether or not such Claim arises or accrues prior to the Document Closing Date, the initial Advance Date or the Completion Date for any Site, in any way relating to, based on to or arising out of (Aa) the execution, delivery and performance any of the Operative Documents or the Pass Through Documents and any of the transactions contemplated therebythereby or any investigation, litigation or proceeding in connection therewith, and any amendment, modification or waiver in respect thereof; or (Bb) the manufacturePremises or any part thereof or interest therein; or (c) the acquisition, mortgaging, design, construction, preparation, installation, inspection, delivery, non-delivery, acceptance, rejection, purchase, acceptance ownership, possession, rental, lease, sublease, repossession, maintenance, repair, alteration, modification, addition or rejection of the Airframe substitution, storage, transfer or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturetitle, purchaseredelivery, registration, reregistrationuse, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacementsale (including, repairwithout limitation, substitutionany sale or other transfer pursuant to Articles XX, saleXXI or XXII of the Lease), return or other disposition of all or any part of any interest in the Aircraft Premises or the imposition of any Lien (or incurring of any liability to refund or pay over any amount as a result of any Lien) thereon, including, without limitation: (i) Claims or penalties arising from any violation of law or in tort (strict liability or otherwise), (ii) loss of or damage to the environment (including, without limitation, any violation investigation costs, cleanup costs, response costs, remediation and removal costs, costs of law relating to the Aircraft (corrective action, costs of financial assurance, and all other damages, costs, fees and expenses, fines and penalties, including environmental lawsnatural resource damages), or death or injury to any Person, and all expenses associated with the protection of wildlife, aquatic species, vegetation, flora and fauna, and any mitigative action required by or under any Environmental Laws, (iii) latent or other defects, whether or not discoverable, strict tort liability (iv) any Claims resulting from the existence or Release of any Hazardous Materials at or from the Premises, (v) the construction of the Financed Improvements and (vi) any claim Claim for patent, trademark or copyright infringement; (Dd) the offer offer, issuance, sale, transfer or sale delivery of the Notes or Certificates; (e) the breach or alleged breach by Lessee of any interest representation or warranty made by it or deemed made by it in any Operative Document; (f) the Trust Estate transactions contemplated hereby or by any other Operative Document, in respect of the Trust Agreement or application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any similar interest on or prior to prohibited transaction described in Section 4975(c) of the Delivery Date (including any violation of securities laws or ERISA); Code, or (Eg) the offer any other agreement entered into or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or assumed by Lessee in connection with the Premises (including, in connection with each of the matters described in this Section 7.1 to which this indemnity shall apply, matters based on or arising from the negligence of any Indemnitee); provided, however, that to the extent any such Claim relates to a refinancing in accordance with specific Site during the terms hereof Construction Period for such Site, Lessee's obligation to indemnify any indemnitee under this Section solely to the extent such Claim relates directly to such Site shall arise upon the Base Term Commencement Date of the Lease Supplement for such Site, whereupon Lessee shall pay such indemnity Claim immediately to the Indemnitee entitled thereto (including provided that the foregoing shall not limit the obligations of Construction Agent to indemnify each Construction Period Indemnitee and Borrower to indemnify each Participant Indemnitee pursuant to Article VII of the Construction Agency Agreement and Article VII of the Loan Agreement). Notwithstanding the foregoing provisions of this Section 7.1(a), Lessee shall not be obligated to indemnify an Indemnitee under this Section 7.1(a) for any violation Claim to the extent that it is attributable to any of securities laws the following: (i) Taxes, loss of tax benefits and the cost and expense of tax controversies (whether or ERISAnot indemnified by Lessee under Section 7.2), other than a payment necessary to make payments under this Section 7.1 on an after-tax basis; provided, that the foregoing indemnity shall exclusion set forth in this clause (i) does not extend to an Indemnitee with respect apply to any Expense to taxes or penalties included in Claims against which the extent such Expense Indemnitee is attributable to one or more provided an indemnification under clause (f) of the following: this Section 7.1; (1ii) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence or willful misconduct of such Indemnitee, or ; (4iii) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) breach by such Indemnitee of all or any part of its interest representations and warranties in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 94.2, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents4.3, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee4.4, as the case may be, not being a Citizen be or the breach by an Indemnitee of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or its covenant in Section 6.2(a) hereof; and (15iv) any amounts attributable to Claim resulting from the imposition of any Certificate Trustee Lien for which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided responsible for discharging under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Participation Agreement (Del Monte Foods Co)

General Indemnity. Lessee Owner hereby agrees to indemnify indemnify, on an after- tax basis, each Indemnitee against, and agrees to protect, save and keep harmless and shall pay on demand each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents or the Pass Through Trust Agreements are consummated), any and all Expenses and Taxes imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the executionOperative Documents and any Permitted Lease, delivery and performance or the enforcement of any of the Operative Documents terms of any thereof; or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, design, purchase, resale, acceptance or rejection of the Airframe or any Engine or Parts; or (C) the Aircraft (or any portion thereof) or any engine Engine whether or not installed on the Airframe or any airframe on which an [Participation Agreement (2001-1 747-1)] Engine is installed whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, possession, storageuse, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, sale, replacement, repair, substitution, saledisposition, return registration, reregistration or other disposition airworthiness of the Aircraft (or any portion thereof) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any damage to property or the environment, death or injury to any person and any claim for patent, trademark or copyright infringement; or (D) the offer offer, sale, holding, transfer or sale delivery of any interest in the Trust Estate Equipment Notes or the Trust Agreement or any similar interest Pass Through Certificates, whether before, on or prior to after the Delivery applicable Issuance Date (including the indemnity in this clause (D) to extend also to any violation person who controls an Indemnitee, its successors, assigns, employees, directors, officers, servants and agents within the meaning of securities laws or ERISASection 15 of the Securities Act of 1933, as amended); or (E) the offer Pass Through Documents and each Pass Through Trust Agreement (and any amendments thereto), or sale the enforcement of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including of any violation of securities laws or ERISA)thereof; provided, with respect to an Indemnitee, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.:

Appears in 1 contract

Samples: Participation Agreement (United Air Lines Inc)

General Indemnity. Scope. Lessee hereby agrees to indemnify indemnify, defend, reimburse and hold harmless, to the fullest extent permitted by Law, each Indemnitee against, from and agrees to protect, save and keep harmless each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), against any and all Expenses imposed on, incurred by or asserted against any Indemnitee, Claims which in any way relating tomay result from, based on pertain to or arising out of (A) the execution, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions arise in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal manner out of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims manner related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, to: the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document, or the breach of any representation, warranty, covenant or Obligation made or to be performed by Lessee hereunder or thereunder; or the condition, design, ownership, manufacture, purchase, delivery, non-delivery, lease, possession, return, disposition, use, or operation of the Aircraft either in the air or on the ground; or any defect in the Aircraft or any Item of Equipment (whether or not discovered or discoverable by Lessee or Lessor) arising from the material or any articles used therein or from the design, testing, or use thereof or from any maintenance, service, repair, overhaul, or testing of the Aircraft or any Item of Equipment, whether or not the Aircraft or any Item of Equipment is in the possession of Lessee, and regardless of where the Aircraft or any Item of Equipment may then be located; or the accuracy, validity or traceability of any of the Aircraft Documents; or any en route navigation charges, navigation service charges, airport charges and landing fees and all other charges payable in connection with the use of or for services provided at any airport or by any navigation service or Governmental Authority, whether in respect of the Aircraft or any other aircraft owned, leased or operated by Lessee; or Xxxxxxxxxx XX-600-2C10; MSN 10070 any lawful action taken by any Indemnitee in relation to the release or attempt to release the Aircraft from any arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Aircraft; or any act or omission of Lessee which invalidates or which renders voidable any Insurances or which is outside the scope of, or excluded from, the coverage thereof. Any such amount Upon payment in full to any Indemnitee of any indemnities contained in this Article 18 by Lessee, Lessee shall be held by subrogated to all rights and remedies which such Person (indemnified party has or may have against the Manufacturer or any other Person. If any Indemnitee or Lessee has knowledge of any Claim for which Lessee is obligated to indemnify under this Article 18, it shall comply with 18.4 below. Lessee's Release. Lessee hereby granting a security interest waives and releases each Indemnitee from any Claims (whether existing now or hereafter arising) for or on account of or arising or in such amount any way connected with injury to such Person) and, if a Lease Event or death of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder personnel of Lessee or loss or damage to such Person as and when due (and, property of Lessee or the loss of use of any property which may result from or arise in any manner out of or in relation to the extent that Lessee has no obligations hereunder to ownership, leasing, condition, use or operation of the Aircraft or any Item of Equipment, either in the air or on the ground, or which may be caused by any defect in the Aircraft or any Item of Equipment from the material or any article used therein or from the design or testing thereof, or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft or any Item of Equipment regardless of when such Persondefect may be discovered, such amount shall be paid to whether or not the Aircraft or any Item of Equipment is at the time in the possession of Lessee). At such time as there shall not be continuing , and regardless of the location of the Aircraft or any Item of Equipment at any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentencetime.

Appears in 1 contract

Samples: Aircraft Lease Agreement (Mesa Air Group Inc)

General Indemnity. The Co-Lessee does hereby agrees to indemnify each Indemnitee againstassume liability for, and agrees to protect, save and keep harmless each of them from (whether or not any of the transactions contemplated herein hereby shall be consummated and whether or in not the Lease, any Lease Supplement or other Operative Document has expired or been terminated) agrees to defend, indemnify, protect, release, save and hold harmless and keep whole each Indemnified Person, on an After-Tax Basis, from and against any and all liabilities (including but not limited to liabilities arising out of the doctrine o strict liability or arising out of violation of regulatory requirements any kind), obligations, losses, damages, penalties, claims, actions, suits, judgments, costs, expenses, charges, fees and disbursements (including out of pocket fees and expenses, Fees and Expenses and costs of investigation), whether any of the other Operative Documents are consummated)foregoing be founded or unfounded, any of whatsoever kind and all Expenses nature (collectively, the "Claims") that may be imposed on, incurred by or asserted against any IndemniteeIndemnified Person or any Equipment, (a) in any way relating to, based on to or arising out of (A) the execution, delivery and performance of Equipment or the Operative Documents (including, without limitation, the performance or enforcement of all obligations of the Lessee, CIROR or the Pass Through Co-Lessee under the Operative Documents and the payments made pursuant thereto or any other transactions contemplated thereby; (B) thereby or the breach of any covenant or agreement contained therein by Lessee, CIROR or Co-Lessee, or the falsity of any representation or warranty made therein by Lessee, CIROR or Co-Lessee,), or the design, manufacture, construction, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufactureacceptance, purchasepossession, registrationrejection, reregistrationcontrol, financing, refinancing, modification, alteration, non-use, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenanceleasing, overhaul, modification, alterationsubleasing, condition, replacementmaintenance, repair, substitution, sale, return abandonment, storage, insurance, redelivery or de-installation of the Equipment or any Item thereof (whether or not such Equipment or Item is in compliance with the Operative Documents), (b) in any way relating to or arising from other disposition of, or the imposition of any Lien (or incurrence of any liability to refund or pay over any amount as a result of any Lien) on, the Aircraft Equipment or any interest therein, including, without limitation, any violation claim or penalty arising out of law relating to the Aircraft violations of Applicable Law, or in tort (including environmental laws)whether creating a strict liability or otherwise) or arising from active or passive negligence of an Indemnified Person, latent or other defects, whether or not discoverablediscoverable by any Indemnified Person, strict tort liability or any other Person, loss of or damage to any property or the environment, death of or injury to any Person and any claim for patent, trademark or copyright infringement; , (Dc) the offer offer, issuance, sale or sale delivery of any interest in the Trust Estate or the Trust Agreement an Note or any similar direct or beneficial interest on or prior to the Delivery Date under any Operative Document, (including d) all costs and expenses incurred by any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or Indemnified Person in connection with a refinancing any Termination Event, any Lease Event of Default, any Event of Loss, any redemption, refunding, prepayment or transfer of the Notes made in accordance with the terms hereof (including Operative Documents, any violation of securities laws amendment, modification or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect supplement to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrectDocument, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee transfer of all or any part of its the right, ti and interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer Trustee or sale by the any Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or in, to and under any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, (e) arising from or in connection with the presence in or on, or release or threatened release of any substance or by-product (11including, without limitation, Hazardous Substances) except to the extent fairly attributable to acts in or events occurring during the Term from any Item of Equipment or actions taken any facility on which any Item of Equipment is located at any time, (f) arising from or required to be taken and not taken) during the Termin connection with any transport, actions taken treatment, recycling, storage, disposal or arrangement therefor, to, at or from an facility of any substance (or required to be taken and not takenincluding, without limitation, any Hazardous Substance) or events occurring after the earlier of: (I) the return by-product generated by any Item of possession Equipment of the Aircraft to the Owner Trustee or its designee pursuant to the terms facility on which any Item of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15)Equipment is located at any time, (IIg) the termination arising from or in connection with any Environmental Law or any published policy or guidance document issued in connection therewith or demand of the Term a Governmental Authority applicable in accordance with Section 9 any way whatsoever to any Item of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss Equipment or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount facility on which any Indemnitee expressly agrees to pay under Item of Equipment is located at any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documentstime, or (13h) any amount that is an ordinary and usual operating arising from or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable relate to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents prohibited transaction or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning other violation of Section 406 of ERISA or Section 4975(c)(1) 4975 of the Code; provided, occurring with respect however, that the Co- Lessee shall not be required pursuant to the purchase or holding of any Pass Through Certificate this Section 6.1 to indemnify: (i) over which purchase any Indemnified Person for any Claim to the extent resulting from acts or holding events occurring after redelivery of all of the Owner Participant or any Affiliate thereof has discretion or control Items of Equipment in accordance with the Lease (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject redelivery pursuant to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate Article XVI thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms and payment of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount all Rent due and payable under the Pass Through Documents (other than the Participation Agreement) but only to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt resulting from acts or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee events occurring prior to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.redelivery;

Appears in 1 contract

Samples: Participation Agreement (Cirrus Logic Inc)

General Indemnity. Lessee Owner hereby agrees to indemnify indemnify, on an after-tax basis, each Indemnitee against, and agrees to protect, save and keep harmless and shall pay on demand each of them from (whether or not the transactions contemplated herein or in any of the other Operative Documents or the Pass Through Trust Agreements are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the executionFundamental Documents, delivery any Permitted Lease and performance each Pass Through Trust Agreement (and any amendments thereto), or the enforcement of any of the Operative Documents terms of any thereof; or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, design, purchase, resale, acceptance or rejection of the Airframe or any Engine or Parts; or (C) the Aircraft (or any portion thereof) or any engine Engine whether or not installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, possession, storageuse, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, sale, replacement, repair, substitution, saledisposition, return registration, reregistration or other disposition airworthiness of the Aircraft (or any portion thereof) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any damage to property or the environment, death or injury to any person and any claim for patent, trademark or copyright infringement; or (D) the offer offer, sale, holding, transfer or sale delivery of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates Certificates, whether before, on or after the applicable Issuance Date (the indemnity in this clause (D) to extend also to any person who controls an Indemnitee, its successors, assigns, employees, directors, officers, servants and agents within the meaning of Section 15 of the Securities Act of 1933, as amended); or (E) any breach of, or failure to perform or observe, or any other noncompliance with, any covenant or agreement or other evidence obligation to be performed by Owner under any Fundamental Document to which it is a party or the falsity of any representation or warranty of the debt relating to the Aircraft) on the Delivery Date or Owner in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA)Fundamental Document; provided, with respect to an Indemnitee, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.:

Appears in 1 contract

Samples: Participation Agreement (United Air Lines Inc)

General Indemnity. Lessee (i) Subject to the exclusions stated in (b) below and the other limitations in this Section 8, the Borrower hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them them, on an After-Tax Basis, from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or Indemnitee arising out of or directly resulting from (A) the executionoperation, delivery and performance possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale of the Operative Documents Designated Aircraft, Airframe or any Engine, or any engine used in connection with any associated Airframe or any part of any of the Pass Through Documents foregoing by the Borrower, any lessee or any other Person whatsoever, whether or not such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale is in compliance with the terms of the Mortgage, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any person whatsoever and the transactions contemplated therebyclaims relating to any laws, rules or regulations pertaining to such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, sale or return including environmental control, noise and pollution laws, rules or regulations; (B) the manufacture, design, purchase, acceptance acceptance, rejection, delivery, or rejection condition of the Designated Aircraft, Airframe or any Engine or Parts; (C) the Aircraft (Engine, any engine used in connection with any Airframe, or any portion thereof) or part of any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft foregoing including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or and other defects, whether or not discoverable, strict tort liability and any claim for patent, or trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense infringement to the extent the Borrower has claims against the Aircraft Manufacturer or Engine Manufacturer for such Expense is attributable to one or more of the following: amounts; (1C) any representation breach of or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe observe, or any of its agreementsother noncompliance with, covenants any covenant or conditions in any agreement to be performed, or other obligation of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of Borrower under any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts falsity of any representation or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession warranty of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and Borrower in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms any of the Operative Documents Documents; (D) the offer, sale and delivery by the Borrower or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under anyone acting on behalf of the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense Borrower of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), Loan Certificates or (14) any amounts relating to the deregistration successor debt obligations issued in connection with the FAA refunding or refinancing thereof (including, without limitation, any claim arising out of the Aircraft as a result Securities Act of the Owner Participant or the Owner Trustee1933, as amended, the case may beSecurities Exchange Act of 1934, not being a Citizen of the United States as amended, or any other act Federal or omission of state statute, law or regulation, or at common law or otherwise relating to securities) (the Owner Trustee, the Owner Participant or such indemnity provided in this clause (D) to extend also to any Person who controls an Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documentsits successors, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documentsassigns, or (17) principal ofemployees, or interest or premium on the Equipment Notesdirectors, or (18) any prohibited transactionofficers, servants and agents within the meaning of Section 406 of ERISA or Section 4975(c)(1) 15 of the Code, occurring with respect to the purchase or holding Securities Act of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when1933, as if, amended); and to the extent, realized or (iiE) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative DocumentsDocuments or any Lease under the Mortgage for the Designated Aircraft, to assume responsibility any Event of Default under the Mortgage for and control the Designated Aircraft or the enforcement against the Borrower of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien terms thereof (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lesseeincluding, without any further actionlimitation, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect Article IX of such Expense pursuant to this Section 6(cMortgage)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Facility Agreement (Hawaiian Holdings Inc)

General Indemnity. Lessee The Owner hereby agrees to indemnify each Indemnitee against, and agrees to protect, defend, save and keep harmless each of them thereof from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, out-of-pocket costs, expenses and disbursements, of whatsoever kind and nature (collectively called "Expenses") imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on to or arising out of (A) the execution, delivery and performance any of the Operative Documents or any lease or sublease of the Pass Through Documents Aircraft or the enforcement of any of the terms thereof or any amendment, modification or waiver in respect thereof and, only in the case of the Indemnitee who is the Subordination Agent or the Liquidity Providers, the Intercreditor Agreement and the transactions contemplated thereby; Liquidity Facilities, (B) the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; Engine, (C) the Aircraft (or any portion thereof) thereof or any Engine or engine installed on affixed to the Airframe or any airframe on which an Engine is installed Airframe) whether or not arising out of the manufacturefinance, purchase, registration, reregistration, financing, refinancingrefinance, ownership, delivery, nondelivery, inspectionstorage, lease, sublease, sub-sublease, possession, storageuse, use or non-use, operation, maintenance, overhaulregistration, reregistration, condition, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft (or any portion thereof or any Engine or engine affixed to the Airframe) including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; infringement or (D) the offer offer, sale or sale delivery of the Secured Certificates (the indemnity in this clause (D) to extend also to any interest in person who controls an Indemnitee within the Trust Estate or meaning of Section 15 of the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation Securities Act of securities laws or ERISA1933, as amended); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, provided that the foregoing indemnity as to any Indemnitee shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to resulting from or arising out of or which would not have occurred but for one or more of the following: (1A) any representation or warranty by such Indemnitee (or any member of the Related Indemnitee Group) in the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities, the Policy Provider Agreement or the any Pass Through Documents Trust Agreement or in connection therewith being incorrectincorrect in any material respect, or (2B) the failure by such Indemnitee (or any member of the Related Indemnitee Group) to perform or observe any of its agreementsagreement, covenants covenant or conditions condition in any of the Operative Documents Documents, the Intercreditor Agreement, the Liquidity Facilities, the Policy Provider Agreement or the any Pass Through DocumentsTrust Agreement applicable to it including, without limitation, the creation or existence of a Loan Participant Lien or an Indenture Trustee's Lien (except to the extent such failure was caused directly by the failure of the Owner to perform any obligation under an Owner Document), or (3C) the willful misconduct or the gross negligence of such IndemniteeIndemnitee (or any member of the Related Indemnitee Group) (other than gross negligence imputed to such Indemnitee (or any member of the Related Indemnitee Group) solely by reason of its interest in the Aircraft), or (4D) (A) in the case of with respect to any Indemnitee, the offer, sale or other a disposition (voluntary or involuntary) by such Indemnitee of all or any part of its such Indemnitee's interest in the Airframe or Airframe, any Engine (or in the Operative Documents other than during the continuance of a Lease an Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of under the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative DocumentsTrust Indenture, or (5E) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee the Owner is required to indemnify for such Tax pursuant to Section 6(b7(b) hereof (it being understood that Section 6(b7(b) hereof and provides for the Tax Indemnity Agreement exclusively provide for LesseeOwner's EXHIBIT L-1 liability with respect to Taxes), or (6F) in the case of the Owner an Indemnitee which is a Loan Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate a Certificate Holder or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or Indenture Trustee (7) in the case of the Owner Trustee in its individual and or trust capacities, capacity) and the Affiliatesaffiliates, successors and assigns thereof, a failure on the part of the Owner Indenture Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee use ordinary care to distribute in accordance with the Trust Indenture any amounts received and distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10G) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendmentsDocuments, supplementsthe Intercreditor Agreement, waivers any of the Liquidity Facilities or consents (a) are not any Pass Through Trust Agreement other than such as have been consented to, approved, authorized or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative DocumentsOwner, or (11H) except subject to the next succeeding paragraph, any loss of tax benefits or increase in tax liability under any tax law whether or not the Owner is required to indemnify therefor pursuant to this Agreement, or (I) any Expense which is specified to be for the account of an Indemnitee pursuant to any Operative Document without express right of reimbursement under any Operative Document, or (J) as to any Indemnitee the funding of such Indemnitee's participation in the transaction contemplated by the Operative Documents giving rise to a "prohibited transaction" within the meaning of the provisions of the Code or the Regulations of the United States Department of Labor implementing ERISA or any other violation of the fiduciary responsibility provisions of ERISA, or (K) to the extent fairly attributable to acts the offer or events occurring during the Term or actions taken sale by such Indemnitee (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession any member of the Aircraft to Related Indemnitee Group) of any interest in the Owner Trustee Aircraft, the Secured Certificates, the Pass Through Certificates, or its designee pursuant to the terms any similar interest, in violation of the Lease Securities Act of 1933, as amended, or other applicable federal, state or foreign securities Laws (other than pursuant any thereof caused by acts or omissions of the Owner or any of its Affiliates). The foregoing indemnity shall not extend to and in accordance with Section 15 thereofany Expense to the extent that such Expense is not caused by, in or does not arise out of, an act, omission or event which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled occurs prior to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 Lien of the Lease, (III) Trust Indenture and the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts other payments required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee Owner under the Operative Documents. The Owner further agrees that any payment or indemnity pursuant to this Section 7(c) in respect of any Expenses shall be in an amount which, after deduction of all Taxes required to be paid by such recipient with respect to such payment or indemnity under the laws of any Federal, state or local government or taxing authority in the United States, or (13) any amount that is an ordinary and usual operating or overhead expense under the laws of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")taxing authority or governmental subdivision of a foreign country, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant territory or the Owner Trustee, as the case may be, not being a Citizen possession of the United States or any other act international authority, shall be equal to the excess, if any, of (A) the amount of such Expense over (B) the net reduction in Taxes required to be paid by such recipient resulting from the accrual or omission payment of such Expense. If, by reason of any Expense payment made to or for the account of an Indemnitee by the Owner Trusteepursuant to this Section 7(c), such Indemnitee subsequently realizes a tax deduction or credit (including foreign tax credit and any reduction in Taxes) not previously taken into account in computing such payment, such Indemnitee shall promptly pay to the Owner, but only if the Owner Participant or such Indemnitee, or (15) any amounts attributable shall have made all payments then due and owing to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any an amount payable under the Pass Through Documents (other than the Participation Agreement) equal to the extent not included sum of (I) the actual reduction in Taxes realized by such Indemnitee which is attributable to such deduction or credit, and (II) the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits actual reduction in Taxes realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraftsentence. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after promptly, upon receiving such notice notice, EXHIBIT L-2 give notice of such claim to Lesseethe Owner; provided that the failure to give provide such notice shall not affect release the Owner from any of its obligations to indemnify hereunder, and no payment by the Owner to an Indemnitee pursuant to this Section 7(c) shall be deemed to constitute a waiver or release of Lessee hereunder except to any right or remedy which the extent Lessee is prejudiced by Owner may have against such failure or the Lessee's indemnification obligations are increased Indemnitee for any actual damages as a result of the failure by such failureIndemnitee to give the Owner such notice. If no Lease Event of Default shall have occurred and be continuing, Lessee The Owner shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) so long as the Owner has agreed in a writing acceptable to such Indemnitee that the Owner is liable to such Indemnitee for such Expense hereunder (unless such Expense is covered by the proviso to the first paragraph of this Section 7(c)), in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinIndemnitee. Notwithstanding any of the foregoing to the contrary, Lessee the Owner shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings (M) while an Event of Default shall have occurred and be continuing, (N) if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, on the Aircraft, the Trust Estate, the Trust Indenture Estate Collateral or any part thereof unless thereof, or (O) if such proceeding could in the good faith opinion of such an event Lessee shall have posted Indemnitee entail any material risk of criminal liability or present a bond or other security satisfactory to the relevant Indemnitees in respect to such riskconflict of interest making separate representation necessary. The affected Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee the Owner pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee the Owner with such information reasonably requested by Lessee the Owner as is necessary or advisable for Lessee the Owner to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lesseethe Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c7(c). The Lessee Owner shall supply the affected Indemnitee with such information reasonably requested by the such Indemnitee as is necessary or advisable for the such Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c7(c). When the Owner or the insurers under a policy of insurance maintained by the Owner (or any Lessee) undertakes the defense of an Indemnitee with respect to an Expense, no additional legal fees or expenses of such Indemnitee in connection with the defense of such Indemnitee shall be indemnified hereunder unless such fees or expenses were incurred at the written request of the Owner or such insurers, provided that no such defense shall be EXHIBIT L-3 compromised or settled on a basis that admits any gross negligence or willful misconduct on the part of such Indemnitee without such Indemnitee's prior consent. In the case of any Expense indemnified by the Owner hereunder which is covered by a policy of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, it shall be a condition of such indemnity with respect to any particular Indemnitee that such Indemnitee shall cooperate with the insurers in the exercise of their rights to investigate, defend or compromise such Expense as may be required to retain the benefits of such insurance with respect to such Expense. Notwithstanding any of the foregoing to the contrary, with respect to any Expense which is covered under policies of insurance maintained by the Owner (or any Lessee) pursuant to Section 7.04 of the Trust Indenture or otherwise, the rights of an Indemnitee to control or participate in any proceeding shall be modified to the extent necessary to comply with the requirements of such policies and the rights of the insurers thereunder. Upon payment of any Expense or Tax pursuant to this Section 6(c)7, Lesseethe Owner or, if any Expense or Tax has been paid by insurers, the insurers, without any further action, shall be subrogated to any claims the affected Indemnitee may have relating theretothereto other than claims under Section 5.03 of the Trust Indenture. The Such Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee the Owner or the insurers to permit Lessee the Owner or the insurers to pursue such claims, if any, to the extent reasonably requested by Lesseethe Owner or the insurers. If In the event that the Owner shall have paid an amount to an Indemnitee is reimbursedpursuant to this Section 7(c), in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid and such Indemnitee subsequently shall be reimbursed in respect of such Expense indemnified amount from any other Person, such Indemnitee shall promptly pay to the Owner an amount equal to the amount of such reimbursement (but in no event more than such payment from the Owner) plus any net tax benefit (or minus any net tax detriment) realized by such Indemnitee as a result of any reimbursement received and payment made by such Indemnitee pursuant to this Section 6(c)sentence, provided that (i) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease no Event of Default has occurred and is continuing or and (ii) such Indemnitee shall have no obligation to reimburse the Owner if the Owner has not paid such Indemnitee all amounts required pursuant to this Section 7(c) and any payment is other amounts then due and owing by Lessee to such Person Indemnitee from the Owner under any of the Operative Documents. The Owner's obligations under the Lease indemnities provided for in this Agreement shall be those of a primary obligor, whether or not the Person indemnified shall also be indemnified with respect to the same matter under the terms of any other Operative Document. Any such amount shall be held by such document or instrument, and the Person (seeking indemnification from the Lessee hereby granting a security interest in such amount Owner pursuant to such Person) and, if a Lease Event any provision of Default shall have occurred and be continuing, shall be applied this Agreement may proceed directly against Lessee's obligations hereunder the Owner without first seeking to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing enforce any such Lease Event other right of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceindemnification.

Appears in 1 contract

Samples: Participation Agreement (Northwest Airlines Inc /Mn)

General Indemnity. Lessee hereby Borrower assumes liability for, and agrees to indemnify each Indemnitee against, and agrees on written demand to protectpay, save and keep harmless or to reimburse each of them from (whether or not Indemnitee for the transactions contemplated herein or in any of the other Operative Documents are consummated)payment of, any and all Expenses liabilities, obligations, losses, damages, penalties, claims (including claims involving strict liability in tort), suits, actions, costs, expenses, and disbursements, including legal fees and expenses, of whatsoever kind and nature (collectively, "Liabilities") imposed on, incurred by by, or asserted against any Indemnitee, in any way Indemnitee relating to, based on to or arising out of (A) any Basic Document, the execution, delivery and performance enforcement against Borrower of any of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection terms of the Airframe Basic Documents, or any Engine lease or Parts; (C) relinquishment of possession of the Aircraft (or any portion thereof) part thereof or any engine installed on action or inaction of Borrower or of any lessee, assignee, or transferee of Borrower in connection therewith, the Airframe or any airframe on which an Engine is installed whether or not arising out purchase of the manufactureAircraft under the Purchase Agreement, purchasethe ownership of the Aircraft, registration, reregistration, financing, refinancing, ownershipthe acquisition, delivery, nondelivery, inspectionacceptance, nonacceptance, rejection, registration, deregistration, insuring, storage, manufacture, assembly, transportation, importation, exportation, maintenance, condition, modification, testing, repair, fitness for use, merchantability, sale, abandonment, lease, sublease, assignment, transfer, transfer of title, possession, storagerepossession, use or non-use, operation, maintenancereturn, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other application or disposition of the Aircraft includingor any component thereof, without limitationthe condition upon return thereof after repossession following the occurrence of an Event of Default or following the exercise of remedies under the Mortgage, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability loss of or damage to any property or the environment, death or injury of any person, and any claim for patent, trademark trademark, copyright, or copyright infringement; (D) mask work infringement and the offer violation or sale infringement by Borrower of any interest in the Trust Estate laws, rules, or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); regulations, or (E) the offer or sale of without limiting any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraftforegoing) any breach by Borrower of, noncompliance by Borrower with, or misrepresentation made or deemed made by or on the Delivery Date behalf of Borrower in, under, or in connection with a refinancing the Purchase Agreement or any Purchase Agreement Assignment or any warranty, certificate, or agreement made or delivered in, under, or in accordance connection with the terms hereof (including Purchase Agreement or any violation of securities laws or ERISA)Purchase Agreement Assignment; provided, that the foregoing indemnity this section shall not extend require Borrower to an pay or indemnify any Indemnitee with respect to under this section (i) for any Expense Liability to the extent resulting from such Expense is attributable Indemnitee's acts of gross negligence or willful misconduct; (ii) for any Taxes (Borrower's duties in respect of Taxes being set forth in section 9.02) or for any cost or expense relating to one the preparation, execution, delivery, or more enforcement of the following: Basic Documents (1Borrower's duties in respect of such costs and expenses being set forth in section 11.03); (iii) for any representation or warranty by Liability that such Indemnitee in incurs to the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe extent resulting from its breach of any of its agreementsrepresentations, warranties, or covenants or conditions in any of the Operative Documents or the Pass Through Documents, or Basic Document; (3iv) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of for any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except Liability to the extent fairly attributable resulting from a claim against such Indemnitee not related to acts any Aircraft, any action or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return inaction of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document Borrower or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documentslessee, assignee, or (13) any amount that is an ordinary and usual operating or overhead expense transferee of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses")Borrower, or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Basic Documents, to assume responsibility ; (v) for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee Liability with respect to judicial proceedings subject transfer taxes or other expenses payable with respect to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control transfer of any such judicial or administrative proceedings if such proceedings will involve a material risk of the saleNote, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lientransfer after the occurrence of an Event of Default; or (vi) on, the Aircraft, the Trust Estate, the Trust Indenture Estate for any violation or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment purported violation of any Expense pursuant law relating to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims usury or the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances charging or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lesseecollecting of excess interest or finance charges. If an any Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.obtains knowledge of

Appears in 1 contract

Samples: Credit Agreement (Asa Holdings Inc)

General Indemnity. Lessee hereby agrees to indemnify indemnify, reimburse, defend and hold harmless each Indemnitee againston a net after-tax basis, as provided in Section 10(e), within fifteen (15) days after demand from and agrees to protect, save against any and keep harmless each of them from all claims (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummatedbased on strict liability), damages (whether Without limiting Lessee's liability under this Section 13, Lessee hereby waives and releases any and all Expenses imposed on, incurred by Claim now or asserted hereafter existing against any Indemnitee, on account of any Claims for or on account of or arising or in any way relating to, based on connected with injury to or arising death of personnel of Lessee or loss or damage to property of Lessee or the loss of use of any property which may result from or arise in any manner out of (A) or in relation to the executionimportation, delivery and performance of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufactureexportation, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufactureownership, purchase, registration, reregistration, financing, refinancing, ownershipderegistration (except as to Owner Participant or Lessor as and to the extent such Indemnitee is responsible under the Refunding Agreement for Claims related to such deregistration), delivery, nondeliverynon-delivery, inspectionassignment, leaseleasing, subleasesubleasing, manufacture, acceptance, rejection, possession, storagereturn, use or non-financing, performance, modification, maintenance, condition, use, operation, maintenancepooling, overhaul, modification, alteration, condition, replacementinterchange, repair, substitutiontesting, sale, return or other disposition of the Aircraft includingEngine or any Part thereof, without limitationeither in the air or on the ground, or which may be caused by any violation defect in the Engine or such Part from the material or any article used therein or from the design or testing thereof, or use thereof or from any maintenance, service, repair, overhaul, or testing of law relating the Engine or such Part, claims for infringement, loss of or injury to the Aircraft (including any person, loss of or damage to any property or environmental laws)damage, latent or other defectsregardless of when such defect may be discovered, whether or not discoverablethe Engine or such Part is at the time in the possession of Lessee, strict tort liability and regardless of the location of the Engine at any claim for patent, trademark or copyright infringement; such time except to the extent that such Claim results from (Di) the offer gross negligence or sale willful misconduct of such Indemnitee (except any such gross negligence or willful misconduct as may be attributed to an Indemnitee due [solely] to its interest in the Trust Estate Engine, any Operative Document, any Purchase Document or any Financing Document), (ii) or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale breach of any interest in of its express representations, warranties or covenants hereunder, under any other Operative Each Indemnitee shall, at Lessee's sole cost and expense and with Lessee's cooperation, be entitled to conduct the Equipment Notes or the Pass Through Certificates (or other evidence defense of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA)Claim against it; provided, however, that Lessee shall, at the foregoing indemnity request of any Indemnitee and, so long as no Event of Default has occurred and is continuing, assume and conduct promptly and diligently, at its sole cost and expense, the defense of such Indemnitee against any Claim of a third party with counsel reasonably acceptable to such Indemnitee; and provided, further, however, that Lessee shall not extend have the right as well as the -76- 82 obligation to an Indemnitee with respect to any Expense assume such defense to the extent such Expense is attributable to one or more required under the terms of the following: (1) applicable insurance policies so long as no Default or Event of Default has occurred and is continuing. In the event Lessee shall so assume the defense of any representation or warranty Claim, such Indemnitee shall cooperate with Lessee in defending such Claim, but any expenses incurred by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) connection therewith shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to either be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less in advance, or reasonable security shall be provided by Lessee to such Indemnitee for such payments. Neither Lessee nor an Indemnitee shall enter into a settlement or other compromise with respect to any payments previously made Claim which Lessee or such Indemnitee is defending hereunder in excess of $100,000 without the prior written consent of the other, which consent shall not be unreasonably withheld. Each Indemnitee agrees to give Lessee prompt notice of any Claims by a third party hereunder following such Indemnitee's actual knowledge of such Claims by third parties, but the failure of such Indemnitee to Lessee pursuant to give the notice required by this Section 6(c)) (and the excess13 shall not constitute a release by Lessor or such Indemnitee of, if anyor reduce, any of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations or liabilities of Lessee to make payments to such Indemnitee pursuant in respect of any such Claim or otherwise affect the obligations or liabilities of Lessee to any Indemnitee in respect of any such Claim, except to the extent that Lessee's ability to control the defense thereof where Lessee has the right to control the defense thereof is materially prejudiced as a result solely of such failure of such Indemnitee to give such notice. An Indemnitee or Lessee shall supply the other with such information requested by the other as is reasonably necessary or advisable for the other to control the defense of a Claim to the extent permitted by this Section 6(c))Section. Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to any indebtedness incurred with respect to the Equipment Notes purchase of the Engine or of the residual value of the AircraftEngine. If a claim is made against an Indemnitee involving one Notwithstanding anything herein or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing Operative Document to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess Claim for which any Indemnitee is entitled to indemnification under more than one provision of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any , such amount Indemnitee shall be held by entitled to recovery for such Person (the Lessee hereby granting a security interest Claim only pursuant to one such provision as it may select in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due its sole discretion (and, to for the extent that Lessee has no obligations hereunder to such Personavoidance of doubt, such amount shall be paid to Lessee). At such time as there Indemnitee shall not be continuing entitled to any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to double recovery for the extent not previously applied in accordance with the immediately preceding sentencesame Claim).

Appears in 1 contract

Samples: Engine Lease Agreement (America West Airlines Inc)

General Indemnity. Lessee The Lessee, whether or not any of the transactions contemplated hereby agrees to indemnify each Indemnitee againstshall be consummated, hereby assumes liability for and agrees to protectdefend, save indemnify and keep hold harmless each of them Indemnified Person on an After Tax Basis from (whether or not the transactions contemplated herein or in and against any of the other Operative Documents are consummated), any and all Expenses Claims which may be imposed on, incurred by or asserted against any Indemnitee, an Indemnified Person in any way relating to, based on to or arising or alleged to arise out of (Aa) the executionfinancing, delivery and performance refinancing, ground lease, purchase, acceptance, rejection, ownership, design, construction, delivery, acceptance, nondelivery, leasing, subleasing, possession, use, operation, repair, maintenance, modification, transportation, condition, operation, sale, return, repossession (whether by summary proceedings or otherwise), or any other disposition of the Operative Documents Property or any part thereof, (b) any latent or other defects in any property whether or not discoverable by an Indemnified Person or the Pass Through Documents and Lessee; (c) a violation of any Legal Requirement or Requirement of Law, including any violation of Environmental Laws, the transactions Release, presence or use of Hazardous Substances on, at, under or emanating from the Property or other loss of or damage relating to the Property; (d) the Operative Agreements, or any transaction contemplated thereby; (Be) any breach by the manufacture, purchase, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale Lessee of any interest in the Trust Estate of its representations or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in warranties under the Operative Documents Agreements or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee the Lessee to perform or observe any of its agreements, covenants covenant or conditions in agreement to be performed by it under any of the Operative Documents Agreements; (f) the invalidation of Lessee's insurance policies related to the Property; (g) personal injury, death or property damage relating to the Property, including Claims based on strict liability in tort; (h) the existence of any Lien on or with respect to the Property, the Improvements, the Equipment, any Basic Rent or Supplemental Rent, title thereto, or any interest therein, including any Liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of the Property or by reason of labor or materials furnished or claimed to have been furnished to the Lessee, the Lessor, or any of their contractors or agents or by reason of the financing of the Property or any personally or equipment purchased or leased by the Lessee or Improvements or Modifications constructed by the Lessee, except Lessor Liens and Liens in favor of the Agent or the Pass Through DocumentsLessor; and (i) the Transactions contemplated hereby or by any other Operative Agreement, in respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any prohibited transaction described in Section 4975(c) of the Code; but in any event excluding (x) Claims to the extent such Claims arise solely out of events occurring after the expiration of the Term and after the Lessee's discharge of all its obligations under the Lease and the other Operative Agreements or (3y) as to any Indemnified Person, any Claim to the extent resulting from the willful misconduct or the gross negligence of such IndemniteeIndemnified Person. The Lessee shall be entitled to control, or (4) (A) and shall assume full responsibility for the defense of, any Claim; provided, however, that any Indemnified Person named in such Claim may retain separate counsel reasonably acceptable to the Lessee at the expense of the Lessee in the case event of and to the extent of an actual conflict. The Lessee and each Indemnified Person agree to give each other prompt written notice of any Indemnitee, Claim hereby indemnified against but the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case giving of any Indemnitee, such notice by an Indemnified Person shall not be a condition to the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes)obligations under this Section 12.1, or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or materially prejudices the Lessee's indemnification obligations are increased rights hereunder. After an Indemnified Person has been fully indemnified for a Claim pursuant to this Section 12.1, and so long as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, the Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable subrogated to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control right of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee Indemnified Person with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate thereinClaim. Notwithstanding any None of the foregoing to Indemnified Persons shall settle a Claim without the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk consent of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Participation Agreement (Lam Research Corp)

General Indemnity. Lessee hereby Borrower assumes liability for, and agrees to indemnify each Indemnitee against, and agrees on written demand to protectpay, save and keep harmless or to reimburse each of them from (whether or not Indemnitee for the transactions contemplated herein or in any of the other Operative Documents are consummated)payment of, any and all Expenses liabilities, obligations, losses, damages, penalties, claims (including claims involving strict liability in tort), suits, actions, costs, expenses, and disbursements, including legal fees and expenses, of whatsoever kind and nature (collectively, "Liabilities") imposed on, incurred by by, or asserted against any Indemnitee, in any way Indemnitee relating to, based on to or arising out of (A) any Basic Document, the execution, delivery and performance enforcement against Borrower of any of the Operative Documents or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance or rejection terms of the Airframe Basic Documents, or any Engine lease or Parts; (C) relinquishment of possession of the Aircraft (or any portion thereof) part thereof or any engine installed on action or inaction of Borrower or of any lessee, assignee, or transferee of Borrower in connection therewith, the Airframe or any airframe on which an Engine is installed whether or not arising out purchase of the manufactureAircraft under the Purchase Agreement, purchasethe ownership of the Aircraft, registration, reregistration, financing, refinancing, ownershipthe acquisition, delivery, nondelivery, inspectionacceptance, nonacceptance, rejection, registration, deregistration, insuring, storage, manufacture, assembly, transportation, importation, exportation, maintenance, condition, modification, testing, repair, fitness for use, merchantability, sale, abandonment, lease, sublease, assignment, transfer, transfer of title, possession, storagerepossession, use or non-use, operation, maintenancereturn, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other application or disposition of the Aircraft includingor any component thereof, without limitationthe condition upon return thereof after repossession following the occurrence of an Event of Default or following the exercise of remedies under the Mortgage, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability loss of or damage to any property or the environment, death or injury of any person, and any claim for patent, trademark trademark, copyright, or copyright infringement; (D) mask work infringement and the offer violation or sale infringement by Borrower of any interest in the Trust Estate laws, rules, or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); regulations, or (E) the offer or sale of without limiting any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraftforegoing) any breach by Borrower of, noncompliance by Borrower with, or misrepresentation made or deemed made by or on the Delivery Date behalf of Borrower in, under, or in connection with a refinancing the Purchase Agreement or any Purchase Agreement Assignment or any warranty, certificate, or agreement made or delivered in, under, or in accordance connection with the terms hereof (including Purchase Agreement or any violation of securities laws or ERISA)Purchase Agreement Assignment; provided, that the foregoing indemnity this section shall not extend require Borrower to an pay or indemnify any Indemnitee under this section (i) for any Liability to the extent resulting from its acts of gross negligence or willful misconduct; (ii) for any Liability with respect to any Expense to the extent such Expense is attributable to one or more Taxes (Borrower's duties in respect of the following: (1) any representation or warranty by such Indemnitee Taxes being set forth in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not takensection 9.02) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee for any cost or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA preparation, execution, delivery, or enforcement of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Basic Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. LesseeBorrower's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid duties in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid costs and expenses being set forth in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.29

Appears in 1 contract

Samples: Credit Agreement (Asa Holdings Inc)

General Indemnity. Lessee (i) Subject to the exclusions stated in (b) below and the other limitations in this Section 8, the Borrower hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them them, on an After-Tax Basis, from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or Indemnitee arising out of or directly resulting from (A) the executionoperation, delivery and performance possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale of the Operative Documents Designated Aircraft, Airframe or any Engine, or any engine used in connection with any associated Airframe or any part of any of the Pass Through Documents foregoing by the Borrower, any lessee or any other Person whatsoever, whether or not such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale is in compliance with the terms of the Mortgage, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any person whatsoever and the transactions contemplated therebyclaims relating to any laws, rules or regulations pertaining to such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, sale or return including environmental control, noise and pollution laws, rules or regulations; (B) the manufacture, design, purchase, acceptance acceptance, rejection, delivery, or rejection condition of the Designated Aircraft, Airframe or any Engine or Parts; (C) the Aircraft (Engine, any engine used in connection with any Airframe, or any portion thereof) or part of any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft foregoing including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or and other defects, whether or not discoverable, strict tort liability and any claim for patent, or trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense infringement to the extent the Borrower has claims against the Aircraft Manufacturer or Engine Manufacturer for such Expense is attributable to one or more of the following: amounts; (1C) any representation breach of or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe observe, or any of its agreementsother noncompliance with, covenants any covenant or conditions in any agreement to be performed, or other obligation of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of Borrower under any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts falsity of any representation or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession warranty of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and Borrower in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms any of the Operative Documents Documents; (D) the offer, sale and delivery by the Borrower or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under anyone acting on behalf of the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense Borrower of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), Loan Certificate or (14) any amounts relating to the deregistration successor debt obligations issued in connection with the FAA refunding or refinancing thereof (including, without limitation, any claim arising out of the Aircraft as a result Securities Act of the Owner Participant or the Owner Trustee1933, as amended, the case may beSecurities Exchange Act of 1934, not being a Citizen of the United States as amended, or any other act Federal or omission of state statute, law or regulation, or at common law or otherwise relating to securities) (the Owner Trustee, the Owner Participant or such indemnity provided in this clause (D) to extend also to any Person who controls an Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documentsits successors, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documentsassigns, or (17) principal ofemployees, or interest or premium on the Equipment Notesdirectors, or (18) any prohibited transactionofficers, servants and agents within the meaning of Section 406 of ERISA or Section 4975(c)(1) 15 of the Code, occurring with respect to the purchase or holding Securities Act of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when1933, as if, amended); and to the extent, realized or (iiE) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative DocumentsDocuments or any Lease under the Mortgage for the [**] — Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. Designated Aircraft, to assume responsibility any Event of Default under the Mortgage for and control the Designated Aircraft or the enforcement against the Borrower of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien terms thereof (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lesseeincluding, without any further actionlimitation, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect Article IX of such Expense pursuant to this Section 6(cMortgage)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Facility Agreement (Hawaiian Holdings Inc)

General Indemnity. Lessee hereby agrees to indemnify indemnify, reimburse, defend and hold harmless each Indemnitee againston a net after-tax basis, as provided in Section 10(e), within fifteen (15) days after demand from and agrees to protect, save against any and keep harmless each of them from all claims (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummatedbased on strict liability), damages (whether direct, indirect, incidental, special or consequential), losses, charges, fees, liabilities, obligations, demands, suits, judgments, actions and other legal proceedings (whether civil or criminal), penalties, fines, other sanctions, and any reasonable costs and expenses, in connection herewith, including, without limitation, costs and expenses set forth in Section 21(j) hereof and reasonable attorney's fees and expenses of whatever kind or nature (any and all Expenses of which are hereafter referred to as "Claims") imposed on, incurred or asserted by or asserted against against, or suffered or incurred by, any Indemnitee, from and after the Restatement Date, including, without limitation, injury, death or property damage of passengers, shippers and others, environmental control, noise and pollution regulations, which in any way relating may result from, pertain to, based on or arising arise in any manner out of of, or are in any manner related to (A1) the executionOperative Documents, delivery and performance of the Operative Purchase Documents or the Pass Through Documents and Financing Documents, or any of the transactions contemplated thereby; (B2) the manufactureAircraft, purchasethe Airframe, acceptance any Engine or rejection of any engine used in connection with the Airframe or any Engine or Parts; Part thereof, including, but not limited to, (CA) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the importation, exportation, condition, manufacture, design, purchase, ownership, registration, reregistration, financing, refinancing, ownershipderegistration (other than any deregistration caused by the failure of the registered owner of the Aircraft to be a "citizen of the United States" as defined under the Federal Aviation Act and the regulations thereunder or to file the documentation necessary to continue FAA registration of the Aircraft), delivery, nondelivery, inspectionassignment, leaseleasing, subleasesubleasing, sub-subleasing, acceptance, rejection, possession, storagerepossession, use or non-control, return, financing, Liens (excluding Lessor's Liens, Head Lessor's Liens and Lenders' Liens, but including the Lien of the Indenture), use, operationperformance, modification, maintenance, overhaul, modificationoperation, alterationpooling, condition, replacementinterchange, repair, substitutiontesting, sale, return or other disposition or application of the Aircraft Aircraft, the Airframe, any Engine, any engine used in connection with the Airframe or any Part (including, but not limited to, latent and other defects whether or not discoverable by Lessee or Lessor, Claims related to any actual or alleged violation of Law, loss or damage to any property of passengers, shippers or otherwise or any Claim related to patent, copyright, trademark or other infringement) either in the air or on the ground, and, including, without limitation, any violation interest therein of law relating to an Indemnitee or imposition of a Lien thereon (excluding Lessor's Liens, Head Lessor's Liens and Lenders' Liens but including the Aircraft (including environmental lawsLien of the Indenture), latent or the rentals, receipts or earnings therefrom (including, without limitation, the Rent and any other defectsamounts paid or payable with respect thereto); or (B) any defect in the Aircraft, the Airframe, any Engine, any engine used in connection with the Airframe or any Part thereof arising from the material or any article used therein, whether from the design, testing or use thereof from any maintenance, service, repair, overhaul or testing of such Aircraft, Airframe, Engine, engine or Part, or otherwise regardless of when such defect shall be discovered, whether or not discoverablesuch Aircraft, strict tort liability Airframe, Engine, engine or Part is at the time in the possession of Lessee, and any claim for patentregardless of where such Aircraft, trademark Airframe, Engine, engine or copyright infringementPart may then be located; or (D3) the offer or sale breach of any representation, warranty or covenant made by Lessee hereunder or under any of the other Operative Documents or any Default or Event of Default; provided, however, that the indemnity provided for in this Section 13 shall not apply to any portion of a Claim of an Indemnitee to the extent it results from: (i) the gross negligence or willful misconduct of such Indemnitee or any of its directors, officers, employees, servants or agents (except any such gross negligence or willful misconduct as may be attributed to an Indemnitee due to its interest in the Trust Estate Aircraft, the Airframe, an Engine, any Operative Document, any Purchase Document or any Financing Document), (ii) the material breach of any express representation, warranty or covenant made by such Indemnitee herein or in any other Operative Document, or the Trust Financing Documents (not resulting from a breach by Lessee of any of its representations, warranties or covenants in the Operative Documents or in the Financing Documents), (iii) any Taxes, whether or not Lessee is required to indemnify such Taxes under Section 10 hereof or the Tax Indemnification Agreement or (it being understood that Section 10 hereof and the Tax Indemnification Agreement exclusively provide for Lessee's liability with respect to Taxes), (iv) any similar interest on or Claim which relates solely to events which occurred prior to the Delivery Restatement Date (including any violation other than Claims related to the condition, manufacture or design of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on and any Claim concerning payment for or the Delivery Date or in connection with a refinancing ownership of Buyer Furnished Equipment, (v) an underlying act which occurs after the Aircraft has been returned to Lessor in accordance with the terms hereof (including any violation and the Term of securities laws this Lease has been terminated or ERISA); provided, that has expired and the foregoing indemnity shall return is not extend related to an Indemnitee with respect Event of Default, (vi) as to any Expense to the extent such Expense is attributable to one or more of the following: (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale an underlying act which occurs after a disposition or other disposition transfer (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe Aircraft, the Airframe, any Engine, or any Engine (other than during the continuance of a Lease Event of Default Part, or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note HolderFinancing Documents, the offer, sale Purchase Documents or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, except as contemplated under or (5) any Tax (other than taxes under ERISA pursuant to the Operative Documents, the Financing Documents or Section 4975 of the Code that are not excluded Purchase Documents and except as resulting from the foregoing indemnity by reason exercise of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except its remedies during the continuance of period while an Event of Default so long as has occurred and is continuing and prior to the time such Indemnitee has received payment of all amounts owing to it hereunder or thereunder and except any Claim which is alleged or does relate to the period prior to such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10vii) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Financing Documents, the Purchase Documents or the Operative Documents Documents, which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement required to give effect to the provisions of the Operative Documents, the Financing Documents or the Purchase Documents (11) except provided, however, in no event will Lessee be liable for any Claims resulting from, pertaining to or arising from or related to Lessor's granting or creating a Lessor's Lien or the extent fairly attributable to acts granting or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return creation of possession a Head Lessor's Lien). Upon full payment of the Aircraft indemnities herein, Lessee shall be subrogated to all rights and remedies which such Indemnitee may have against any third party against whom such Indemnitee has the Owner Trustee right to assert a Claim which arises under any action described in this Section 13 (except Claims under such Indemnitee's own insurance policies or its designee pursuant to under the terms indemnification provisions of any of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Financing Documents). Without limiting Lessee's liability under this Section 6(c13, Lessee hereby waives and releases any Claim now or hereafter existing against any Indemnitee, on account of any Claims for or on account of or arising or in any way connected with injury to or death of personnel of Lessee or loss or damage to property of Lessee or the loss of use of any property which may result from or arise in any manner out of or in relation to the importation, exportation, ownership, purchase, registration, reregistration, deregistration (except as to Owner Participant or Lessor as and to the extent such Indemnitee is responsible under the Refunding Agreement for Claims related to such deregistration), delivery, non-delivery, assignment, leasing, subleasing, manufacture, acceptance, rejection, possession, return, financing, performance, modification, maintenance, condition, use, operation, pooling, interchange, repair, testing, sale, return or other disposition of the Aircraft, the Airframe, any Engine or any engine used in connection with the Airframe or any Part thereof, either in the air or on the ground, or which may be caused by any defect in such Aircraft, Airframe, Engine, engine or Part from the material or any article used therein or from the design or testing thereof, or use thereof or from any maintenance, service, repair, overhaul, or testing of such Aircraft, Airframe, Engine, engine or Part, claims for infringement, loss of or injury to any person, loss of or damage to any property or environmental damage, regardless of when such defect may be discovered, whether or not such Aircraft, Airframe, Engine, engine or Part is at the time in the possession of Lessee, and regardless of the location of such Aircraft at any such time except to the extent that such Claim results from (i) shall survive for so long the gross negligence or willful misconduct of such Indemnitee (except any such gross negligence or willful misconduct as Lessor shall may be entitled attributed to exercise remedies under such Section 15an Indemnitee due to its interest in the Aircraft, the Airframe, an Engine, any Operative Document, any Purchase Document or any Financing Document), (IIii) the termination breach of the Term in accordance with Section 9 any of the Leaseits express representations, warranties or covenants hereunder, under any other Operative Document or Financing Document (III) the payment not resulting from a breach by Lessee of all amounts required to be paid under the Lease following an Event any of Loss its representations, warranties or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of covenants in the Operative Documents or in the Financing Documents), (12iii) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative DocumentsTaxes, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify such Taxes under Section 10 hereof or the Tax Indemnification Agreement (it being understood that Section 10 hereof and the Tax Indemnification Agreement exclusively provide for Lessee's liability with respect to Taxes), (iv) any Claim which relates solely to events which occurred prior to the Restatement Date (other than Claims related to the condition, manufacture or design of the Aircraft) and any Claim concerning payment for or the ownership of Buyer Furnished Equipment, (v) an underlying act which occurs after the Aircraft has been returned to Lessor in accordance with the terms hereof and the Term of this Lease has been terminated or has expired and the return is not related to an Event of Default, (vi) as to such Indemnitee, an underlying act which occurs after a disposition or other transfer (voluntary or involuntary) by such Indemnitee elsewhere of all or any part of its interest in the Aircraft, the Airframe, any Engine, or any Part, or in the Financing Documents, the Purchase Documents or the Operative Documents (except as contemplated under or pursuant to the Operative Documents, the Financing Documents or the Purchase Documents and except as resulting from the exercise of its remedies during the period while an Event of Default has occurred and is continuing and prior to the time such Indemnitee has received payment of all amounts owing to it hereunder or thereunder and except any Claim which is alleged or does relate to the period prior to such disposition), (17vii) principal ofthe authorization or giving or withholding of any future amendments, supplements, waivers or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring consents with respect to any of the purchase Financing Documents, the Purchase Documents or holding the Operative Documents, which amendments, supplements, waivers or consents were not requested by Lessee or are not required to give effect to the provisions of the Operative Documents, the Financing Documents or the Purchase Documents or (viii) a Lessor's Lien, a Head Lessor's Lien or a Lenders' Lien attributable to such Indemnitee. Each Indemnitee shall, at Lessee's sole cost and expense and with Lessee's cooperation, be entitled to conduct the defense of any Pass Through Certificate (i) over which purchase or holding Claim against it; provided, however, that Lessee shall, at the Owner Participant or request of any Affiliate thereof Indemnitee and so long as no Event of Default has discretion or control (other than in occurred and is continuing, assume and conduct promptly and diligently, at its sole cost and expense, the capacity defense of such Indemnitee against any Claim of a directed trustee or custodian)third party with counsel reasonably acceptable to such Indemnitee; and provided, or (ii) by an employee benefit planfurther, within however, that Lessee shall have the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject right as well as the obligation to Section 4975 of assume such defense to the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate extent required under the terms of the management agreement withapplicable insurance policies so long as no Default or Event of Default has occurred and is continuing. In the event Lessee shall so assume the defense of any Claim, the Person or Persons having discretion or control (other than such Indemnitee shall cooperate with Lessee in the capacity of a directed trustee or custodian)defending such Claim, over such purchase or holding, or (19) without limiting but any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized expenses incurred by such Indemnitee as a result of the accrual or payment of such Expense in connection therewith shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax either be paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less in advance, or reasonable security shall be provided by Lessee to such Indemnitee for such payments. Neither Lessee nor an Indemnitee shall enter into a settlement or other compromise with respect to any payments previously made Claim which Lessee or such Indemnitee is defending hereunder in excess of $100,000 without the prior written consent of the other, which consent shall not be unreasonably withheld. Each Indemnitee agrees to give Lessee prompt notice of any Claims by a third party hereunder following such Indemnitee's actual knowledge of such Claims by third parties, but the failure of such Indemnitee to Lessee pursuant to give the notice required by this Section 6(c)) (and the excess13 shall not constitute a release by Lessor or such Indemnitee of, if anyor reduce, any of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations or liabilities of Lessee to make payments to such Indemnitee pursuant in respect of any such Claim or otherwise affect the obligations or liabilities of Lessee to any Indemnitee in respect of any such Claim, except to the extent that Lessee's ability to control the defense thereof where Lessee has the right to control the defense thereof is materially prejudiced as a result solely of such failure of such Indemnitee to give such notice. An Indemnitee or Lessee shall supply the other with such information requested by the other as is reasonably necessary or advisable for the other to control the defense of a Claim to the extent permitted by this Section 6(c))Section. Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to any indebtedness incurred with respect to the Equipment Notes purchase of the Aircraft or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one Notwithstanding anything herein or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing Operative Document to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess Claim for which any Indemnitee is entitled to indemnification under more than one provision of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any , such amount Indemnitee shall be held by entitled to recovery for such Person (the Lessee hereby granting a security interest Claim only pursuant to one such provision as it may select in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due its sole discretion (and, to for the extent that Lessee has no obligations hereunder to such Personavoidance of doubt, such amount shall be paid to Lessee). At such time as there Indemnitee shall not be continuing entitled to any such double recovery for the same Claim). The indemnities contained in this Section 13 shall continue in full force and effect notwithstanding the expiration or other termination of this Lease Event or any of Default or there shall not be due the other Operative Documents and owing any such payment, such amount are expressly made for the benefit of and shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceenforceable by each Indemnitee.

Appears in 1 contract

Samples: Aircraft Lease Agreement (America West Airlines Inc)

General Indemnity. Lessee (i) Subject to the exclusions stated in (b) below and the other limitations in this Section 8, the Borrower hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each of them them, on an After-Tax Basis, from (whether or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based on or Indemnitee arising out of or directly resulting from (A) the executionoperation, delivery and performance possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale of the Operative Documents Designated Aircraft, Airframe or any Engine, or any engine used in connection with any associated Airframe or any part of any of the Pass Through Documents foregoing by the Borrower, any lessee or any other Person whatsoever, whether or not such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, nonuse, modification, alteration, or sale is in compliance with the terms of the Mortgage, including, without limitation, claims for death, personal injury or property damage or other loss or harm to any person whatsoever and the transactions contemplated therebyclaims relating to any laws, rules or regulations pertaining to such operation, possession, use, maintenance, overhaul, testing, registration, reregistration, delivery, non-delivery, lease, non-use, modification, alteration, sale or return including environmental control, noise and pollution laws, rules or regulations; (B) the manufacture, design, purchase, acceptance acceptance, rejection, delivery, or rejection condition of the Designated Aircraft, Airframe or any Engine or Parts; (C) the Aircraft (Engine, any engine used in connection with any Airframe, or any portion thereof) or part of any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft foregoing including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or and other defects, whether or not discoverable, strict tort liability and any claim for patent, or trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt relating to the Aircraft) on the Delivery Date or in connection with a refinancing in accordance with the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense infringement to the extent the Borrower has claims against the Aircraft Manufacturer or Engine Manufacturer for such Expense is attributable to one or more of the following: amounts; (1C) any representation breach of or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2) the failure by such Indemnitee to perform or observe observe, or any of its agreementsother noncompliance with, covenants any covenant or conditions in any agreement to be performed, or other obligation of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of Borrower under any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts falsity of any representation or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession warranty of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and Borrower in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms any of the Operative Documents Documents; (D) the offer, sale and delivery by the Borrower or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under anyone acting on behalf of the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense Borrower of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), Loan Certificate or (14) any amounts relating to the deregistration successor debt obligations issued in connection with the FAA refunding or refinancing thereof (including, without limitation, any claim arising out of the Aircraft as a result Securities Act of the Owner Participant or the Owner Trustee1933, as amended, the case may beSecurities Exchange Act of 1934, not being a Citizen of the United States as amended, or any other act Federal or omission of state statute, law or regulation, or at common law or otherwise relating to securities) (the Owner Trustee, the Owner Participant or such indemnity provided in this clause (D) to extend also to any Person who controls an Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documentsits successors, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documentsassigns, or (17) principal ofemployees, or interest or premium on the Equipment Notesdirectors, or (18) any prohibited transactionofficers, servants and agents within the meaning of Section 406 of ERISA or Section 4975(c)(1) 15 of the Code, occurring with respect to the purchase or holding Securities Act of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when1933, as if, amended); and to the extent, realized or (iiE) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative DocumentsDocuments or any Lease under the Mortgage for the Designated Aircraft, to assume responsibility any Event of Default under the Mortgage for and control the Designated Aircraft or the enforcement against the Borrower of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien terms thereof (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lesseeincluding, without any further actionlimitation, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect Article IX of such Expense pursuant to this Section 6(cMortgage)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Facility Agreement (Hawaiian Holdings Inc)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to The Company will at all times protect, indemnify and save harmless the Collateral Agent, each Lender and keep harmless each of them their respective officers, directors, employees, agents and representatives (referred to herein as the “Indemnitees”) from and against all liabilities, obligations, claims, judgments, damages, penalties, fines, assessments, losses, indemnities, contributions, causes of action, costs and expenses (whether including, without limitation, the fees and expenses of attorneys, auditors and consultants) imposed upon or not the transactions contemplated herein or in any of the other Operative Documents are consummated), any and all Expenses imposed on, incurred by or asserted against any Indemnitee, in any way relating to, based the Indemnitees on or arising out account of (Aa) the execution, delivery and performance any failure of the Operative Documents Company or the Pass Through Documents and the transactions contemplated thereby; (B) the manufacture, purchase, acceptance any Subsidiary or rejection any employee or agent of any thereof to comply with any of the Airframe terms, covenants, obligations or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out prohibitions of the manufacture, purchase, registration, reregistration, financing, refinancing, ownership, delivery, nondelivery, inspection, lease, sublease, possession, storage, use or non-use, operation, maintenance, overhaul, modification, alteration, condition, replacement, repair, substitution, sale, return or other disposition of the Aircraft including, without limitation, any violation of law relating to the Aircraft (including environmental laws), latent or other defects, whether or not discoverable, strict tort liability and any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust this Agreement or any similar interest on or prior to other Financing Document (as defined in the Delivery Date Intercreditor Agreement), (including b) any violation of securities laws or ERISA); or (E) the offer or sale breach of any interest in the Equipment Notes representation or the Pass Through Certificates (or other evidence warranty of the debt relating Company or any Subsidiary set forth in this Agreement or in any other Financing Document or any certificate delivered by the Company or any Subsidiary pursuant hereto or thereto, or any claim that any statement, representation or warranty of the Company or any Subsidiary in any of the foregoing documents contains or contained any untrue or misleading statement of material fact or omits or omitted to state any material facts necessary to make the Aircraftstatements made therein not misleading in light of the circumstances under which they were made, (c) on the Delivery Date any action, suit, claim, proceeding or investigation of a judicial, legislative, administrative or regulatory nature arising from or in connection with a refinancing in accordance with the terms hereof Collateral, including without limitation (including 1) the presence, escape, seepage, leakage, discharge, emission, release, removal or threatened release, or disposal of any Hazardous Materials and (2) any violation of securities laws any law, ordinance or ERISA); providedgovernmental rules or regulations including without limitation any Environmental Law, (d) any suit, action, administrative proceeding, enforcement action, or governmental or private action of any kind whatsoever commenced against the Company, any Subsidiary or any Indemnitee which might adversely affect the validity or enforceability of this Agreement or any other Financing Document or the performance by the Company or any Subsidiary of any of its obligations hereunder or thereunder or (e) any loss or damage to property or any injury to or death of any Person that the foregoing indemnity shall not extend to an Indemnitee with respect may be occasioned by any cause whatsoever pertaining to any Expense to Collateral or the extent such Expense is attributable to one or more of use thereof, and shall further indemnify and save harmless the following: Indemnitees from and against (1) all amounts paid in settlement of any representation litigation commenced or warranty by such reasonably threatened against any Indemnitee in that falls within the Operative Documents or the Pass Through Documents being incorrectscope of clauses (a) through (e) above, or and (2) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) all expenses reasonably incurred in the case investigation of, preparation for or defense of any Indemniteelitigation, the offer, sale proceeding or other disposition (voluntary or involuntary) by such Indemnitee of all or any part of its interest in the Airframe or any Engine (other than during the continuance of a Lease Event of Default or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the Lease), (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case investigation of any Indemnitee, nature whatsoever that falls within the offer, sale or other disposition by such Indemnitee scope of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case of the Owner Participant, the offer or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Event of Default so long as such disposition is made in accordance with Section 7(k), or (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10) the authorization or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents clauses (a) are not through (e) above, commenced or were not requested by Lessee or (b) are not occasioned by a specific requirement of reasonably threatened against the Operative DocumentsCompany, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document Subsidiary or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary or advisable for the Indemnitee to control or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentence.

Appears in 1 contract

Samples: Credit Agreement (Modine Manufacturing Co)

General Indemnity. Lessee hereby agrees to indemnify each Indemnitee against, and agrees to protect, save and keep harmless each (a) Payment of them from (whether Indemnified Expenses by Lessee. Whether or not the transactions contemplated herein or in any of the other ----------------------------------------- transactions contemplated by the Operative Documents shall be consummated (unless such transactions are consummatedconsummated and any of the items hereinafter described shall constitute Transaction Costs), the Lessee shall pay, and shall indemnify and hold harmless each Indemnitee from and against, any and all Expenses liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements, including legal fees and expenses, of whatsoever kind and nature (herein collectively referred to as "Indemnified Expenses" and individually as an "Indemnified Expense"), imposed on, incurred by or asserted against any IndemniteeIndemnitee (whether because of an action or omission by such Indemnitee or otherwise), in any way relating to, based on to or arising out of (Ai) the executionOperative Documents, delivery and performance the Notes or the participation of the Operative Documents Lessor, or the Pass Through Documents and the payments made pursuant thereto or any other transactions contemplated therebyby the Operative Documents; (Bii) the manufacture, purchasefinancing, acceptance or rejection of the Airframe or any Engine or Parts; (C) the Aircraft (or any portion thereof) or any engine installed on the Airframe or any airframe on which an Engine is installed whether or not arising out of the manufactureconstruction, purchase, registrationacceptance, reregistration, financing, refinancingrejection, ownership, acquisition, delivery, nondelivery, inspection, lease, sublease, possessionre-lease, preparation, installation, storage, use or non-maintenance, repair, transportation, transfer of title, abandonment, possession, rental, use, operation, maintenance, overhaul, modification, alteration, condition, replacementreturn, repair, substitution, sale, return sale or other disposition or other application of all or any part of any interest in the Aircraft includingEquipment, including without limitation, limitation (A) claims or penalties arising from any violation of law relating or based upon liability in tort (strict or otherwise) or from the active or passive negligence of any Indemnitee, (B) loss of or damage to any property or the Aircraft environment or death or injury to any Person, (including environmental laws), C) latent or other defects, whether or not discoverable, strict tort liability and (D) any claim for patent, trademark or copyright infringement; (D) the offer or sale of any interest in the Trust Estate or the Trust Agreement or any similar interest on or prior to the Delivery Date (including any violation of securities laws or ERISA); or (E) the offer or sale of any interest in the Equipment Notes or the Pass Through Certificates (or other evidence of the debt infringement relating to the Aircraft) on Equipment, the Delivery Date Overall Transaction or in connection with a refinancing in accordance with any process, method or product used or produced by the terms hereof (including any violation of securities laws or ERISA); provided, that the foregoing indemnity shall not extend to an Indemnitee with respect to any Expense to the extent such Expense is attributable to one or more Lessee by operation of the following: Equipment; (1) any representation or warranty by such Indemnitee in the Operative Documents or the Pass Through Documents being incorrect, or (2iii) the failure by such Indemnitee to perform or observe any of its agreements, covenants or conditions in any of the Operative Documents or the Pass Through Documents, or (3) the willful misconduct or the gross negligence of such Indemnitee, or (4) (A) in the case of any Indemnitee, the offer, sale or other disposition (voluntary or involuntary) by such Indemnitee of all the Equipment or any part of its interest in the Airframe or any Engine (other than during the continuance of thereof after a Lease Event of Default or Default, an Event of Loss, a termination of the Lease pursuant to and Article XVIII or a purchase by the Lessee pursuant to Article VI; (iv) the presence, handling, use or storage of any Hazardous Substance or Hazardous Condition on, in, under or around Lessee's Premises, or the transportation of any Hazardous Substance to or from Lessee's Premises, including without limitation any Release, spill, discharge, emission, migration or disposal, whether on- or off-site, of any Hazardous Substance; or (v) violation or claim of violation of any laws for the protection of human health or safety or the environment, including Environmental Law(s), in accordance connection with Sections 9, 10, 15 use or 19 operation of Lessee's Premises or any equipment or facilities used in connection therewith. Without limitation of the Lease)foregoing, (B) in the case of a Note Holder, the offer, sale or other disposition (voluntary or involuntary) by such Note Holder of all or any part of its interest in any Equipment Note or (C) in the case of any Indemnitee, the offer, sale or other disposition by such Indemnitee of all or any part of such Indemnitee's interest in the Operative Documents, or (5) any Tax (other than taxes under ERISA or Section 4975 of the Code that are not excluded from the foregoing indemnity by reason of clause 18 below) whether or not Lessee is required to indemnify for such Tax pursuant to Section 6(b) hereof (it being understood that Section 6(b) hereof and the Tax Indemnity Agreement exclusively provide for Lessee's liability with respect to Taxes), or (6) in the case any of the Owner Participanttransactions contemplated by the Operative Documents shall be consummated (except to the extent that any of the items hereafter described shall constitute Transaction Costs, the offer Lessee shall pay all reasonable costs and expenses incurred by any Indemnitee in connection with (i) a Lease Default or sale by the Owner Participant after the Delivery Date of any interest in the Trust Estate or the Trust Agreement or any similar interest except during the continuance of an Lease Event of Default so long as such disposition is made in accordance with Section 7(k), or Default; (7) in the case of the Owner Trustee in its individual and trust capacities, and the Affiliates, successors and assigns thereof, a failure on the part of the Owner Trustee to distribute in accordance with the Trust Agreement any amounts distributable by it thereunder, or (8) in the case of the Indenture Trustee in its individual and trust capacities, failure on the part of the Indenture Trustee to distribute in accordance with the Trust Indenture any amounts distributable by it thereunder, or (9) in the case of any Pass Through Trustee, failure on the part of such Pass Through Trustee or the Subordination Agent to distribute in accordance with the Intercreditor Agreement and the Pass Through Trust Agreement amounts received and distributable thereunder, or (10ii) the authorization entering into or giving or withholding of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents which amendments, supplements, waivers or consents (a) are not or were not requested by Lessee or (b) are not occasioned by a specific requirement of the Operative Documents, or (11) except to the extent fairly attributable to acts or events occurring during the Term or actions taken (or required to be taken and not taken) during the Term, actions taken (or required to be taken and not taken) or events occurring after the earlier of: (I) the return of possession of the Aircraft to the Owner Trustee or its designee pursuant to the terms of the Lease (other than pursuant to and in accordance with Section 15 thereof, in which case Lessee's liability under this Section 6(c) shall survive for so long as Lessor shall be entitled to exercise remedies under such Section 15), (II) the termination of the Term in accordance with Section 9 of the Lease, (III) the payment by Lessee of all amounts required to be paid under the Lease following an Event of Loss or (IV) termination of the Lease and payment by Lessee of all amounts required to be paid by Lessee pursuant to the terms of the Operative Documents or (12) any amount which any Indemnitee expressly agrees to pay under any Operative Document or any amount which is expressly stated to be an Expense that is not reimbursable by Lessee under the Operative Documents, or (13) any amount that is an ordinary and usual operating or overhead expense of any Indemnitee (it being understood out-of-pocket expenses payable to third parties do not constitute "ordinary and usual operating and overhead expenses"), or (14) any amounts relating to the deregistration with the FAA of the Aircraft as a result of the Owner Participant or the Owner Trustee, as the case may be, not being a Citizen of the United States or any other act or omission of the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any amounts attributable to any Lien which such Indemnitee is required to remove pursuant to the terms of the Operative Documents or the Pass Through Documents, or (16) any loss of tax benefits or increases in tax liability whether or not the Lessee is required to indemnify an Indemnitee elsewhere in the Operative Documents, or (17) principal of, or interest or premium on the Equipment Notes, or (18) any prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with respect to the purchase or holding of any Pass Through Certificate (i) over which purchase or holding the Owner Participant or any Affiliate thereof has discretion or control (other than in the capacity of a directed trustee or custodian), or (ii) by an employee benefit plan, within the meaning of Section 3(3) of ERISA, or individual retirement account or plan subject to Section 4975 of the Code with respect to which the Owner Participant (or any Affiliate thereof) has the power, directly or indirectly, to appoint or terminate, or to negotiate the terms of the management agreement with, the Person or Persons having discretion or control (other than in the capacity of a directed trustee or custodian), over such purchase or holding, or (19) without limiting any indemnification otherwise expressly provided under the Operative Documents, any amount payable under the Pass Through Documents (other than the Participation Agreement) to the extent not included in the definition of Supplemental Rent. Lessee's indemnity obligation to an Indemnitee under this Section 6(c) shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 6(c) and any tax benefits realized by such Indemnitee as a result of the accrual or payment of such Expense shall equal the amount of the Expense indemnifiable under this Section 6(c). If any Indemnitee shall realize a tax savings by reason of any Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Indemnitee shall pay to Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 6(c) by Lessee to such Indemnitee (less any payments previously made by such Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Indemnitee pursuant to this Section 6(c)). Nothing in this Section 6(c) shall be construed as a guaranty by Lessee of payments due pursuant to the Equipment Notes or of the residual value of the Aircraft. If a claim is made against an Indemnitee involving one or more Expenses and such Indemnitee has notice thereof, such Indemnitee shall promptly after receiving such notice give notice of such claim to Lessee; provided that the failure to give such notice shall not affect the obligations of Lessee hereunder except to the extent Lessee is prejudiced by such failure or the Lessee's indemnification obligations are increased as a result of such failure. If no Lease Event of Default shall have occurred and be continuing, Lessee shall be entitled, at its sole cost and expense, acting through counsel reasonably acceptable to the respective Indemnitee, (A) in any judicial or administrative proceeding that involves solely a claim for one or more Expenses, to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for one or more Expenses and other claims related or unrelated to the transactions contemplated by the Operative Documents, to assume responsibility for and control of such claim for Expenses to the extent that the same may be and is severed from such other claims (and such Indemnitee shall use its best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnitee with respect to judicial proceedings subject to the control of such Indemnitee and to be allowed, at Lessee's sole expense, to participate therein. Notwithstanding any of the foregoing to the contrary, Lessee shall not be entitled to assume responsibility for and control of any such judicial or administrative proceedings if such proceedings will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on, the Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof unless in such an event Lessee shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk. The Indemnitee may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. The affected Indemnitee shall supply Lessee with such information reasonably requested by Lessee as is necessary or advisable for Lessee to control or participate in any proceeding to the extent permitted by this Section 6(c). Such Indemnitee shall not enter into a settlement or other compromise with respect to any Expense without the prior written consent of Lessee, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 6(c). The Lessee shall supply the Indemnitee with such information reasonably requested by the Indemnitee as is necessary Lessee; or advisable for the Indemnitee to control (iii) any Event of Loss, or participate in any proceeding to the extent permitted by this Section 6(c). Upon payment of any Expense pursuant to this Section 6(c), Lessee, without any further action, shall be subrogated to any claims the Indemnitee may have relating thereto. The Indemnitee agrees to give such further assurances or agreements and to cooperate with Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably requested by Lessee. If an Indemnitee is reimbursed, in whole or in part, with respect to any Expense paid by Lessee hereunder, it will promptly pay the amount refunded, including interest received thereto (but not an amount in excess prepayment of the amount Lessee or any of its insurers has paid in respect of such Expense pursuant to this Section 6(c)) over to Lessee. To the extent permitted by applicable law, interest at the Base Rate plus one percent (1.0%) shall be paid, on demand, on any amount or indemnity not paid when due pursuant to this Section 6 until the same shall be paid. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due. Any amount which is payable to Lessee by any Person pursuant to this Section 6 shall not be paid to Lessee if a Lease Event of Default has occurred and is continuing or if any payment is due and owing by Lessee to such Person under the Lease or any other Operative Document. Any such amount shall be held by such Person (the Lessee hereby granting a security interest in such amount to such Person) and, if a Lease Event of Default shall have occurred and be continuing, shall be applied against Lessee's obligations hereunder to such Person as and when due (and, to the extent that Lessee has no obligations hereunder to such Person, such amount shall be paid to Lessee). At such time as there shall not be continuing any such Lease Event of Default or there shall not be due and owing any such payment, such amount shall be paid to Lessee to the extent not previously applied in accordance with the immediately preceding sentenceNotes.

Appears in 1 contract

Samples: Equipment Lease Agreement (California Steel Industries Inc)

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