Common use of Right to Defend; Subrogation; Fees and Expenses of Trustees Clause in Contracts

Right to Defend; Subrogation; Fees and Expenses of Trustees. Lessee shall be entitled (and, at the Indemnified Party's election, shall be obligated), at its sole cost and expense, acting through counsel selected by Lessee reasonably acceptable to the respective Indemnified Party, (A) in any judicial or administrative proceeding that involves solely a claim for which payment or indemnity is sought under this Section 7(c), to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for which payment or indemnity is sought under this Section 7(c), and other claims related or unrelated to the transactions contemplated by the Operative Agreements, to assume responsibility for and the control of such claim for which payment or indemnity is sought under this Section 7(c) to the extent that the same may be and is severed from such other claims (and such Indemnified Party shall use its reasonable best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnified Party with respect to judicial proceedings subject to the control of such Indemnified Party. 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 (1) while any Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default shall have occurred and be continuing, (2) 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 or the Trust Estate or the Trust Indenture Estate or any part thereof or the loss or impairment of the Lien of the Trust Indenture on all or any part of the Trust Indenture Estate, (3) if such proceedings could, in the good faith opinion of the Indemnified Party, entail any risk of material criminal liability or material civil penalty or (4) if in the written opinion of counsel to such Indemnified Party an actual or potential material conflict of interest exists making it advisable for such Indemnified Party to be represented by separate counsel. The Indemnified Party may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. PARTICIPATION AGREEMENT [N396SW] -27- 33 The Indemnified Party shall supply Lessee, at Lessee's expense, with such information within its possession 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 7(c) (other than the tax records or returns or pricing or confidential information of or relating to the Owner Participant or its Affiliates). Such Indemnified Party shall not enter into a settlement or other compromise with respect to any Loss without the prior written consent of Lessee (except during the continuance of a Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default when such consent shall not be required if such Indemnified Party gives 10 days' prior written notice to Lessee describing the proposed settlement or other compromise), which consent shall not be unreasonably withheld or delayed, unless such Indemnified Party waives its right to be indemnified with respect to such Loss under this Section 7(c). Lessee shall supply the Indemnified Party with such information reasonably requested by the Indemnified Party as is necessary or advisable for the Indemnified Party to control or participate in any proceeding to the extent permitted by this Section 7(c). Upon payment or indemnification of any amount pursuant to this Section 7(c), Lessee, without any further action, shall be subrogated to any claims the Indemnified Party may have relating thereto other than claims under Section 5.03 or 7.01 of the Trust Agreement or Section 9.06 of the Trust Indenture, comparable claims arising in favor of the Owner Trustee or the Indenture Trustee as a matter of trust law and claims under any insurance maintained by any Indemnified Party or any of its Affiliates. The Indemnified Party agrees to give such further assurances or agreements and to cooperate in all reasonable respects with Lessee and its insurers to permit Lessee to pursue such claims. In the event that Lessee shall have paid an amount to an Indemnified Party pursuant to this Section 7(c), and such Indemnified Party subsequently shall be reimbursed in respect of such indemnified amount by any other Person, such Indemnified Party shall (provided no Lease Default or Lease Event of Default shall have occurred and be continuing) promptly pay (but not before Lessee shall have made all payments then due to such Indemnified Party pursuant to this Section 7(c) and any other payments then due under the Operative Agreements) an amount equal to the amount of such reimbursement (adjusted for any net tax impact of such receipt and payment, but in no event more than such indemnified amount previously paid to such Person) to Lessee. Subject to the provisions of the preceding sentence, Lessee's obligations under the 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 document or instrument, and the Person seeking indemnification from Lessee 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 and continuing fees and expenses of the Indenture Trustee (including the reasonable fees and expenses of its counsel and any agent appointed in accordance with Section 2.03 or 9.02(c) of the Trust Indenture) and the amounts payable to the Owner Trustee pursuant to Section 6.07 of the Trust Agreement (including, but not limited to, the reasonable fees and expenses of its counsel), without cost, on a net after-tax PARTICIPATION AGREEMENT [N396SW] -28- 34 basis, to the Owner Participant, for acting as such, other than such fees and expenses which constitute Transaction Costs for which the Owner Participant is obligated under Section 16. Lessee agrees that it will pay the reasonable fees and expenses of any separate owner trustee or co-trustee appointed pursuant to Section 9.02 of the Trust Agreement as a result of any requirement of law or if otherwise required by any Operative Agreement or if requested, or consented to, by Lessee. Lessee hereby waives and releases any claim now or hereafter existing against any Indemnified Party arising out of the death or personal injury to personnel of Lessee, loss or damage to the property or business of Lessee, or the loss of use of any property or business of Lessee, which results from or arises out of the condition, use or operation of the Aircraft, including, without limitation, any latent or patent defect whether or not discoverable unless, in any such case, such claim would, if asserted against Lessee, be excluded from Lessee's indemnification obligations hereunder by reason of Section 7(c)(ii).

Right to Defend; Subrogation; Fees and Expenses of Trustees. Lessee shall be entitled (and, at the Indemnified Party's election, shall be obligated), at its sole cost and expense, acting through counsel selected by Lessee reasonably acceptable to the respective Indemnified Party, (A) in any judicial or administrative proceeding that involves solely a claim for which payment or indemnity is sought under this Section 7(c), to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for which payment or indemnity is sought under this Section 7(c), and other claims related or unrelated to the transactions contemplated by the Operative Agreements, to assume responsibility for and the control of such claim for which payment or indemnity is sought under this Section 7(c) to the extent that the same may be and is severed from such other claims (and such Indemnified Party shall use its reasonable best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnified Party with respect to judicial proceedings subject to the control of such Indemnified Party. 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 (1) while any Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default shall have occurred and be continuing, (2) 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 or the Trust Estate or the Trust Indenture Estate or any part thereof or the loss or impairment of the Lien of the Trust Indenture on all or any part of the Trust Indenture Estate, (3) if such proceedings could, in the good faith opinion of the Indemnified Party, entail any risk of material criminal liability or material civil penalty or (4) if in the written opinion of counsel to such Indemnified Party an actual or potential material conflict of interest exists making it advisable for such Indemnified Party to be represented by separate counsel. The Indemnified PARTICIPATION AGREEMENT [N604SW] -25- 31 Party may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. PARTICIPATION AGREEMENT [N396SW] -27- 33 The Indemnified Party shall supply Lessee, at Lessee's expense, with such information within its possession 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 7(c) (other than the tax records or returns or pricing or confidential information of or relating to the Owner Participant or its Affiliates). Such Indemnified Party shall not enter into a settlement or other compromise with respect to any Loss without the prior written consent of Lessee (except during the continuance of a Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default when such consent shall not be required if such Indemnified Party gives 10 days' prior written notice to Lessee describing the proposed settlement or other compromise), which consent shall not be unreasonably withheld or delayed, unless such Indemnified Party waives its right to be indemnified with respect to such Loss under this Section 7(c). Lessee shall supply the Indemnified Party with such information reasonably requested by the Indemnified Party as is necessary or advisable for the Indemnified Party to control or participate in any proceeding to the extent permitted by this Section 7(c). Upon payment or indemnification of any amount pursuant to this Section 7(c), Lessee, without any further action, shall be subrogated to any claims the Indemnified Party may have relating thereto other than claims under Section 5.03 or 7.01 of the Trust Agreement or Section 9.06 of the Trust Indenture, comparable claims arising in favor of the Owner Trustee or the Indenture Trustee as a matter of trust law and claims under any insurance maintained by any Indemnified Party or any of its Affiliates. The Indemnified Party agrees to give such further assurances or agreements and to cooperate in all reasonable respects with Lessee and its insurers to permit Lessee to pursue such claims. In the event that Lessee shall have paid an amount to an Indemnified Party pursuant to this Section 7(c), and such Indemnified Party subsequently shall be reimbursed in respect of such indemnified amount by any other Person, such Indemnified Party shall (provided no Lease Default or Lease Event of Default shall have occurred and be continuing) promptly pay (but not before Lessee shall have made all payments then due to such Indemnified Party pursuant to this Section 7(c) and any other payments then due under the Operative Agreements) an amount equal to the amount of such reimbursement (adjusted for any net tax impact of such receipt and payment, but in no event more than such indemnified amount previously paid to such Person) to Lessee. Subject to the provisions of the preceding sentence, Lessee's obligations under the 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 document or instrument, and the Person seeking indemnification from Lessee 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 and continuing fees and expenses of the Indenture Trustee (including the reasonable fees and expenses of its counsel and any agent appointed in accordance with Section 2.03 or 9.02(c) of the Trust Indenture) and the amounts payable to the Owner Trustee pursuant to and, as provided in Section 6.07 of the Trust Agreement Agreement, the Owner Trustee (including, but not limited to, the reasonable fees and expenses of its counsel), without cost, on a net after-tax PARTICIPATION AGREEMENT [N396SW] -28- 34 basis, to the Owner Participant, for acting as such, other than such fees and expenses which constitute Transaction Costs for which the Owner Participant is obligated under Section 16Costs. Lessee agrees that it will pay the PARTICIPATION AGREEMENT [N604SW] -26- 32 reasonable fees and expenses of any separate owner trustee or co-trustee appointed pursuant to Section 9.02 of the Trust Agreement as a result of any requirement of law or if otherwise required by any Operative Agreement or if requested, or consented to, by the Lessee. Lessee hereby waives and releases any claim now or hereafter existing against any Indemnified Party arising out of the death or personal injury to personnel of Lessee, loss or damage to the property or business of Lessee, or the loss of use of any property or business of Lessee, which results from or arises out of the condition, use or operation of the Aircraft, including, without limitation, any latent or patent defect whether or not discoverable unless, in any such case, such claim would, if asserted against Lessee, be excluded from Lessee's indemnification obligations hereunder by reason of Section 7(c)(ii).

Right to Defend; Subrogation; Fees and Expenses of Trustees. Lessee shall be entitled (and, at the Indemnified Party's election, shall be obligated), at its sole cost and expense, acting through counsel selected by Lessee reasonably acceptable to the respective Indemnified Party, (A) in any judicial or administrative proceeding that involves solely a claim for which payment or indemnity is sought under this Section 7(c), to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for which payment or indemnity is sought under this Section 7(c), and other claims related or unrelated to the transactions contemplated by the Operative Agreements, to assume responsibility for and the control of such claim for which payment or indemnity is sought under this Section 7(c) to the extent that the same may be and is severed from such other claims (and such Indemnified Party shall use its reasonable best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnified Party with respect to judicial proceedings subject to the control of such Indemnified Party. 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 (1) while any Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default shall have occurred and be continuing, (2) 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 or the Trust Estate or the Trust Indenture Estate or any part thereof or the loss or impairment of the Lien of the Trust Indenture on all or any part of the Trust Indenture Estate, (3) if such proceedings could, in the good faith opinion of the Indemnified Party, entail any risk of material criminal liability or material civil penalty or (4) if in the written opinion of counsel to such Indemnified Party an actual or potential material conflict of interest exists making it advisable for such Indemnified Party to be represented by separate counsel. The Indemnified Party may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. PARTICIPATION AGREEMENT [N396SW] -27- 33 The Indemnified Party shall supply Lessee, at Lessee's expense, with such information within its possession 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 7(c) (other than the tax records or returns or pricing or confidential information of or relating to the Owner Participant or its Affiliates). Such Indemnified Party shall not enter into a settlement or other compromise with respect to any Loss without the prior written consent of Lessee (except during the continuance of a Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default when such consent shall not be required if such Indemnified Party gives 10 days' prior written notice to Lessee describing the proposed settlement or other compromise), which consent shall not be unreasonably withheld or delayed, unless such Indemnified Party waives its right to be indemnified with respect to such Loss under this Section 7(c). Lessee shall supply the Indemnified Party with such information reasonably requested by the Indemnified Party as is necessary or advisable for the Indemnified Party to control or participate in any proceeding to the extent permitted by this Section 7(c). PARTICIPATION AGREEMENT [N603SW] -26- 32 Upon payment or indemnification of any amount pursuant to this Section 7(c), Lessee, without any further action, shall be subrogated to any claims the Indemnified Party may have relating thereto other than claims under Section 5.03 or 7.01 of the Trust Agreement or Section 9.06 of the Trust Indenture, comparable claims arising in favor of the Owner Trustee or the Indenture Trustee as a matter of trust law and claims under any insurance maintained by any Indemnified Party or any of its Affiliates. The Indemnified Party agrees to give such further assurances or agreements and to cooperate in all reasonable respects with Lessee and its insurers to permit Lessee to pursue such claims. In the event that Lessee shall have paid an amount to an Indemnified Party pursuant to this Section 7(c), and such Indemnified Party subsequently shall be reimbursed in respect of such indemnified amount by any other Person, such Indemnified Party shall (provided no Lease Default or Lease Event of Default shall have occurred and be continuing) promptly pay (but not before Lessee shall have made all payments then due to such Indemnified Party pursuant to this Section 7(c) and any other payments then due under the Operative Agreements) an amount equal to the amount of such reimbursement (adjusted for any net tax impact of such receipt and payment, but in no event more than such indemnified amount previously paid to such Person) to Lessee. Subject to the provisions of the preceding sentence, Lessee's obligations under the 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 document or instrument, and the Person seeking indemnification from Lessee 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 and continuing fees and expenses of the Indenture Trustee (including the reasonable fees and expenses of its counsel and any agent appointed in accordance with Section 2.03 or 9.02(c) of the Trust Indenture) and the amounts payable to the Owner Trustee pursuant to and, as provided in Section 6.07 of the Trust Agreement Agreement, the Owner Trustee (including, but not limited to, the reasonable fees and expenses of its counsel), without cost, on a net after-tax PARTICIPATION AGREEMENT [N396SW] -28- 34 basis, to the Owner Participant, for acting as such, other than such fees and expenses which constitute Transaction Costs for which the Owner Participant is obligated under Section 16Costs. Lessee agrees that it will pay the reasonable fees and expenses of any separate owner trustee or co-trustee appointed pursuant to Section 9.02 of the Trust Agreement as a result of any requirement of law or if otherwise required by any Operative Agreement or if requested, or consented to, by the Lessee. Lessee hereby waives and releases any claim now or hereafter existing against any Indemnified Party arising out of the death or personal injury to personnel of Lessee, loss or damage to the property or business of Lessee, or the loss of use of any property or business of Lessee, which results from or arises out of the condition, use or operation of the Aircraft, including, without limitation, any latent or patent defect whether or not discoverable unless, in any such case, such claim would, if asserted against Lessee, be excluded from Lessee's indemnification obligations hereunder by reason of Section 7(c)(ii).

Right to Defend; Subrogation; Fees and Expenses of Trustees. Lessee shall be entitled (and, at the Indemnified Party's election, shall be obligated), at its sole cost and expense, acting through counsel selected by Lessee reasonably acceptable to the respective Indemnified Party, (A) in any judicial or administrative proceeding that involves solely a claim for which payment or indemnity is sought under this Section 7(c), to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for which payment or indemnity is sought under this Section 7(c), and other claims related or unrelated to the transactions contemplated by the Operative Agreements, to assume responsibility for and the control of such claim for which payment or indemnity is sought under this Section 7(c) to the extent that the same may be and is severed from such other claims (and such Indemnified Party shall use its reasonable best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnified Party with respect to judicial proceedings subject to the control of such Indemnified Party. 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 (1) while any Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default shall have occurred and be continuing, (2) 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 or the Trust Estate or the Trust Indenture Estate or any part thereof or the loss or impairment of the Lien of the Trust Indenture on all or any part of the Trust Indenture Estate, (3) if such proceedings could, in the good faith opinion of the Indemnified Party, entail any risk of material criminal liability or material civil penalty or (4) if in the written opinion of counsel to such Indemnified Party an actual or potential material conflict of interest exists making it advisable for such Indemnified Party to be represented by separate counsel. The Indemnified Party may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. PARTICIPATION AGREEMENT [N396SWN397SW] -27- 33 The Indemnified Party shall supply Lessee, at Lessee's expense, with such information within its possession 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 7(c) (other than the tax records or returns or pricing or confidential information of or relating to the Owner Participant or its Affiliates). Such Indemnified Party shall not enter into a settlement or other compromise with respect to any Loss without the prior written consent of Lessee (except during the continuance of a Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default when such consent shall not be required if such Indemnified Party gives 10 days' prior written notice to Lessee describing the proposed settlement or other compromise), which consent shall not be unreasonably withheld or delayed, unless such Indemnified Party waives its right to be indemnified with respect to such Loss under this Section 7(c). Lessee shall supply the Indemnified Party with such information reasonably requested by the Indemnified Party as is necessary or advisable for the Indemnified Party to control or participate in any proceeding to the extent permitted by this Section 7(c). Upon payment or indemnification of any amount pursuant to this Section 7(c), Lessee, without any further action, shall be subrogated to any claims the Indemnified Party may have relating thereto other than claims under Section 5.03 or 7.01 of the Trust Agreement or Section 9.06 of the Trust Indenture, comparable claims arising in favor of the Owner Trustee or the Indenture Trustee as a matter of trust law and claims under any insurance maintained by any Indemnified Party or any of its Affiliates. The Indemnified Party agrees to give such further assurances or agreements and to cooperate in all reasonable respects with Lessee and its insurers to permit Lessee to pursue such claims. In the event that Lessee shall have paid an amount to an Indemnified Party pursuant to this Section 7(c), and such Indemnified Party subsequently shall be reimbursed in respect of such indemnified amount by any other Person, such Indemnified Party shall (provided no Lease Default or Lease Event of Default shall have occurred and be continuing) promptly pay (but not before Lessee shall have made all payments then due to such Indemnified Party pursuant to this Section 7(c) and any other payments then due under the Operative Agreements) an amount equal to the amount of such reimbursement (adjusted for any net tax impact of such receipt and payment, but in no event more than such indemnified amount previously paid to such Person) to Lessee. Subject to the provisions of the preceding sentence, Lessee's obligations under the 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 document or instrument, and the Person seeking indemnification from Lessee 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 and continuing fees and expenses of the Indenture Trustee (including the reasonable fees and expenses of its counsel and any agent appointed in accordance with Section 2.03 or 9.02(c) of the Trust Indenture) and the amounts payable to the Owner Trustee pursuant to Section 6.07 of the Trust Agreement (including, but not limited to, the reasonable fees and expenses of its counsel), without cost, on a net after-tax PARTICIPATION AGREEMENT [N396SWN397SW] -28- 34 basis, to the Owner Participant, for acting as such, other than such fees and expenses which constitute Transaction Costs for which the Owner Participant is obligated under Section 16. Lessee agrees that it will pay the reasonable fees and expenses of any separate owner trustee or co-trustee appointed pursuant to Section 9.02 of the Trust Agreement as a result of any requirement of law or if otherwise required by any Operative Agreement or if requested, or consented to, by Lessee. Lessee hereby waives and releases any claim now or hereafter existing against any Indemnified Party arising out of the death or personal injury to personnel of Lessee, loss or damage to the property or business of Lessee, or the loss of use of any property or business of Lessee, which results from or arises out of the condition, use or operation of the Aircraft, including, without limitation, any latent or patent defect whether or not discoverable unless, in any such case, such claim would, if asserted against Lessee, be excluded from Lessee's indemnification obligations hereunder by reason of Section 7(c)(ii).

Right to Defend; Subrogation; Fees and Expenses of Trustees. Lessee shall be entitled (and, at the Indemnified Party's election, shall be obligated), at its sole cost and expense, acting through counsel selected by Lessee reasonably acceptable to the respective Indemnified Party, (A) in any judicial or administrative proceeding that involves solely a claim for which payment or indemnity is sought under this Section 7(c), to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for which payment or indemnity is sought under this Section 7(c), and other claims related or unrelated to the transactions contemplated by the Operative Agreements, to assume responsibility for and the control of such claim for which payment or indemnity is sought under this Section 7(c) to the extent that the same may be and is severed from such other claims (and such Indemnified Party shall use its reasonable best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnified Party with respect to judicial proceedings subject to the control of such Indemnified Party. 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 (1) while any Lease Default (of the PARTICIPATION AGREEMENT [N605SW] -25- 31 type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default shall have occurred and be continuing, (2) 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 or the Trust Estate or the Trust Indenture Estate or any part thereof or the loss or impairment of the Lien of the Trust Indenture on all or any part of the Trust Indenture Estate, (3) if such proceedings could, in the good faith opinion of the Indemnified Party, entail any risk of material criminal liability or material civil penalty or (4) if in the written opinion of counsel to such Indemnified Party an actual or potential material conflict of interest exists making it advisable for such Indemnified Party to be represented by separate counsel. The Indemnified Party may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. PARTICIPATION AGREEMENT [N396SW] -27- 33 The Indemnified Party shall supply Lessee, at Lessee's expense, with such information within its possession 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 7(c) (other than the tax records or returns or pricing or confidential information of or relating to the Owner Participant or its Affiliates). Such Indemnified Party shall not enter into a settlement or other compromise with respect to any Loss without the prior written consent of Lessee (except during the continuance of a Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default when such consent shall not be required if such Indemnified Party gives 10 days' prior written notice to Lessee describing the proposed settlement or other compromise), which consent shall not be unreasonably withheld or delayed, unless such Indemnified Party waives its right to be indemnified with respect to such Loss under this Section 7(c). Lessee shall supply the Indemnified Party with such information reasonably requested by the Indemnified Party as is necessary or advisable for the Indemnified Party to control or participate in any proceeding to the extent permitted by this Section 7(c). Upon payment or indemnification of any amount pursuant to this Section 7(c), Lessee, without any further action, shall be subrogated to any claims the Indemnified Party may have relating thereto other than claims under Section 5.03 or 7.01 of the Trust Agreement or Section 9.06 of the Trust Indenture, comparable claims arising in favor of the Owner Trustee or the Indenture Trustee as a matter of trust law and claims under any insurance maintained by any Indemnified Party or any of its Affiliates. The Indemnified Party agrees to give such further assurances or agreements and to cooperate in all reasonable respects with Lessee and its insurers to permit Lessee to pursue such claims. In the event that Lessee shall have paid an amount to an Indemnified Party pursuant to this Section 7(c), and such Indemnified Party subsequently shall be reimbursed in respect of such indemnified amount by any other Person, such Indemnified Party shall (provided no Lease Default or Lease Event of Default shall have occurred and be continuing) promptly pay (but not before Lessee shall have made all payments then due to such Indemnified Party pursuant to this Section 7(c) and any other payments then due under the Operative Agreements) an amount equal to the amount of such reimbursement (adjusted for any net tax impact of such receipt and payment, but in no event more than such indemnified amount previously paid to such Person) to Lessee. Subject to the provisions of the preceding sentence, Lessee's obligations under the 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 document or instrument, and the Person seeking indemnification from Lessee 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 and continuing fees and expenses of the Indenture Trustee (including the reasonable fees and expenses of its counsel and any agent appointed in accordance with Section 2.03 or 9.02(c) of the Trust Indenture) and the amounts payable to the Owner Trustee pursuant to and, as provided in Section 6.07 of the Trust Agreement Agreement, the Owner Trustee (including, but not limited to, the reasonable fees and expenses of its counsel), without cost, on a net after-tax PARTICIPATION AGREEMENT [N396SW] -28- 34 basis, to the Owner Participant, for acting as such, other than such fees and expenses which constitute Transaction Costs for which the Owner Participant is obligated under Section 16Costs. Lessee agrees that it will pay the reasonable fees and expenses of any separate owner trustee or co-trustee appointed pursuant to Section 9.02 of the Trust Agreement as a result of any requirement of law or if otherwise required by any Operative Agreement or if requested, or consented to, by the Lessee. Lessee hereby waives and releases any claim now or hereafter existing against any Indemnified Party arising out of the death or personal injury to personnel of Lessee, loss or damage to the property or business of Lessee, or the loss of use of any property or business of Lessee, which results from or arises out of the condition, use or operation of the Aircraft, including, without limitation, any latent or patent defect whether or not discoverable unless, in any such case, such claim would, if asserted against Lessee, be excluded from Lessee's indemnification obligations hereunder by reason of Section 7(c)(ii).

Right to Defend; Subrogation; Fees and Expenses of Trustees. Lessee shall be entitled (and, at the Indemnified Party's election, shall be obligated), at its sole cost and expense, acting through counsel selected by Lessee reasonably acceptable to the respective Indemnified Party, (A) in any judicial or administrative proceeding that involves solely a claim for which payment or indemnity is sought under this Section 7(c), to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for which payment or indemnity is sought under this Section 7(c), and other claims related or unrelated to the transactions contemplated by the Operative Agreements, to assume responsibility for and the control of such claim for which payment or indemnity is sought under this Section 7(c) to the extent that the same may be and is severed from such other claims (and such Indemnified Party shall use its reasonable best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnified Party with respect to judicial proceedings subject to the control of such Indemnified Party. 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 (1) while any Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default shall have occurred and be continuing, (2) 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 or the Trust Estate or the Trust Indenture Estate or any part thereof or the loss or impairment of the Lien of the Trust Indenture on all or any part of the Trust Indenture Estate, (3) if such proceedings could, in the good faith opinion of the Indemnified Party, entail any risk of material criminal liability or material civil penalty or (4) if in the written opinion of counsel to such Indemnified Party an actual or potential material conflict of interest exists making it advisable for such Indemnified Party to be represented by separate counsel. The Indemnified Party may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. PARTICIPATION AGREEMENT [N396SW] -27- 33 The Indemnified Party shall supply Lessee, at Lessee's expense, with such information within its possession 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 7(c) (other than the tax records or returns or pricing or confidential information of or relating to the Owner Participant or its Affiliates). Such Indemnified Party shall not enter into a settlement or other compromise with respect to any Loss without the prior written consent of Lessee (except during the continuance of a Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default when such consent shall not be required if such Indemnified Party gives 10 days' prior written notice to Lessee describing the proposed settlement or other compromise), which consent shall not be unreasonably withheld or delayed, unless such Indemnified Party waives its right to be indemnified with respect to such Loss under this Section 7(c). Lessee shall supply the Indemnified Party with such information reasonably requested by the Indemnified Party as is necessary or advisable for the Indemnified Party to control or participate in any proceeding to the extent permitted by this Section 7(c). Upon payment or indemnification of any amount pursuant to this Section 7(c), Lessee, without any further action, shall be subrogated to any claims the Indemnified Party may have relating thereto other than claims under Section 5.03 or 7.01 of the Trust Agreement or Section 9.06 of the Trust Indenture, comparable claims arising in favor of the Owner Trustee or the Indenture Trustee as a matter of trust law and claims under any insurance maintained by any Indemnified Party or any of its Affiliates. The Indemnified Party agrees to give such further assurances or agreements and to cooperate in all reasonable respects with Lessee and its insurers to permit Lessee to pursue such claims. In the event that Lessee shall have paid an amount to an Indemnified Party pursuant to this Section 7(c), and such Indemnified Party subsequently shall be reimbursed in respect of such indemnified amount by any other Person, such Indemnified Party shall (provided no Lease Default or Lease Event of Default shall have occurred and be continuing) promptly pay (but not before Lessee shall have made all payments then due to such Indemnified Party pursuant to this Section 7(c) and any other payments then due under the Operative Agreements) an amount equal to the amount of such reimbursement (adjusted for any net tax impact of such receipt and payment, but in no event more than such indemnified amount previously paid to such Person) to Lessee. Subject to the provisions of the preceding sentence, Lessee's obligations under the 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 document or instrument, and the Person seeking indemnification from Lessee 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 and continuing fees and expenses of the Indenture Trustee (including the reasonable fees and expenses of its counsel and any agent appointed in accordance with Section 2.03 or 9.02(c) of the Trust Indenture) and the amounts payable to the Owner Trustee pursuant to Section 6.07 of the Trust Agreement (including, but not limited to, the reasonable fees and expenses of its counsel), without cost, on a net after-tax PARTICIPATION AGREEMENT [N396SW] -28- 34 basis, to the Owner Participant, for acting as such, other than such fees and expenses which constitute Transaction Costs for which the Owner Participant is obligated under Section 16. Lessee agrees that it will pay the reasonable fees and expenses of any separate owner trustee or co-trustee appointed pursuant to Section 9.02 of the Trust Agreement as a result of any requirement of law or if otherwise required by any Operative Agreement or if requested, or consented to, by Lessee. Lessee hereby waives and releases any claim now or hereafter existing against any Indemnified Party arising out of the death or personal injury to personnel of Lessee, loss or damage to the property or business of Lessee, or the loss of use of any property or business of Lessee, which results from or arises out of the condition, use or operation of the Aircraft, including, without limitation, any latent or patent defect whether or not discoverable unless, in any such case, such claim would, if asserted against Lessee, be excluded from Lessee's indemnification obligations hereunder by reason of Section 7(c)(ii).

Right to Defend; Subrogation; Fees and Expenses of Trustees. Lessee shall be entitled (and, at the Indemnified Party's election, shall be obligated), at its sole cost and expense, acting through counsel selected by Lessee reasonably acceptable to the respective Indemnified Party, (A) in any judicial or administrative proceeding that involves solely a claim for which payment or indemnity is sought under this Section 7(c), to assume responsibility for and control thereof, (B) in any judicial or administrative proceeding involving a claim for which payment or indemnity is sought under this Section 7(c), and other claims related or unrelated to the transactions contemplated by the Operative Agreements, to assume responsibility for and the control of such claim for which payment or indemnity is sought under this Section 7(c) to the extent that the same may be and is severed from such other claims (and such Indemnified Party shall use its reasonable best efforts to obtain such severance), and (C) in any other case, to be consulted by such Indemnified Party with respect to judicial proceedings subject to the control of such Indemnified Party. 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 (1) while any Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default shall have occurred and be continuing, (2) 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 or the Trust Estate or the Trust Indenture Estate or any part thereof or the loss or impairment of the Lien of the Trust Indenture on all or any part of the Trust Indenture Estate, (3) if such proceedings could, in the good faith opinion of the Indemnified Party, entail any risk of material criminal liability or material civil penalty or (4) if in the written opinion of counsel to such Indemnified Party an actual or potential material conflict of interest exists making it advisable for such Indemnified Party to be represented by separate counsel. The Indemnified Party may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to the preceding provisions. PARTICIPATION AGREEMENT [N396SW] -27- 33 The Indemnified Party shall supply Lessee, at Lessee's expense, with such information within its possession 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 7(c) (other than the tax records or returns or pricing or confidential information of or relating to the Owner Participant or its Affiliates). Such Indemnified Party shall not enter into a settlement or other compromise with respect to any Loss without the prior written consent of Lessee (except during the continuance of a Lease Default (of the type described in Section 14.1 or 14.5 of the Lease) or Lease Event of Default when such consent shall not be required if such Indemnified Party gives 10 days' prior written notice to Lessee describing the proposed settlement or other compromise), which consent shall not be unreasonably withheld or delayed, unless such Indemnified Party waives its right to be indemnified with respect to such Loss under this Section 7(c). Lessee shall supply the Indemnified Party with such information reasonably requested by the Indemnified Party as is necessary or advisable for the Indemnified Party to control or participate in any proceeding to the extent permitted by this Section 7(c). Upon payment or indemnification of any amount pursuant to this Section 7(c), Lessee, without any further action, shall be subrogated to any claims the Indemnified Party may have relating thereto other than claims under Section 5.03 or 7.01 of the Trust Agreement or Section 9.06 of the Trust Indenture, comparable claims arising in favor of the Owner Trustee or the Indenture Trustee as a matter of trust law and claims under any insurance maintained by any Indemnified Party or any of its Affiliates. The Indemnified Party agrees to give such further assurances or agreements and to cooperate in all reasonable respects with Lessee and its insurers to permit Lessee to pursue such claims. In the event that Lessee shall have paid an amount to an Indemnified Party pursuant to this Section 7(c), and such Indemnified Party subsequently shall be reimbursed in respect of such indemnified amount by any other Person, such Indemnified Party shall (provided no Lease Default or Lease Event of Default shall have occurred and be continuing) promptly pay (but not before Lessee shall have made all payments then due to such Indemnified Party pursuant to this Section 7(c) and any other payments then due under the Operative Agreements) an amount equal to the amount of such reimbursement (adjusted for any net tax impact of such receipt and payment, but in no event more than such indemnified amount previously paid to such Person) to Lessee. Subject to the provisions of the preceding sentence, Lessee's obligations under the 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 document or instrument, and the Person seeking indemnification from Lessee 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 and continuing fees and expenses of the Indenture Trustee (including the reasonable fees and expenses of its counsel and any agent appointed in accordance with Section 2.03 or 9.02(c) of the Trust Indenture) and the amounts payable to the Owner Trustee pursuant to and, as provided in Section 6.07 of the Trust Agreement Agreement, the Owner Trustee (including, but not limited to, the reasonable fees and expenses of its counsel), without cost, on a net after-tax PARTICIPATION AGREEMENT [N396SW] -28- 34 basis, to the Owner Participant, for acting as such, other than such fees and expenses which constitute Transaction Costs for which the Owner Participant is obligated under Section 16Costs. Lessee agrees that it will pay the reasonable fees and expenses of any separate owner trustee or co-trustee appointed pursuant to Section 9.02 of the Trust Agreement as a result of any requirement of law or if otherwise required by any Operative Agreement or if requested, or consented to, by the Lessee. Lessee hereby waives and releases any claim now or hereafter existing against any Indemnified Party arising out of the death or personal injury to personnel of Lessee, loss or damage to the property or business of Lessee, or the loss of use of any property or business of Lessee, which results from or arises out of the condition, use or operation of the Aircraft, including, without limitation, any latent or patent defect whether or not discoverable unless, in any such case, such claim would, if asserted against Lessee, be excluded from Lessee's indemnification obligations hereunder by reason of Section 7(c)(ii).