Common use of Engine Maintenance Clause in Contracts

Engine Maintenance. (a) The Company agrees that at all times each of the engines included in the collateral under the Credit Agreement (the “Engines”) will be subject to an engine maintenance agreement with General Electric Aircraft Engines (“GEAE”), MTU or such other provider of engine maintenance services as may be acceptable to the Administrative Agent and the Requisite Lenders, in each case in accordance with an engine maintenance agreement that is in form and substance satisfactory to the Administrative Agent and the Requisite Lenders (it being understood and agreed that (x) any engine maintenance agreement with respect to any Engine that is not a “power by the hour” engine maintenance agreement or similar agreement that provides for the prepayment of maintenance expense shall not be satisfactory to the Administrative Agent and the Requisite Lenders and (y) the GEAE and MTU engine maintenance agreements as in effect on the date hereof are satisfactory to the Administrative Agent and the Requisite Lenders). Notwithstanding the foregoing, the Company may amend the existing GEAE and MTU engine maintenance agreements to reduce the hourly rate payable thereunder to the extent attributable to demonstrable hourly rate and materials cost savings with the relevant engine maintenance provider (as determined by the Administrative Agent) and to the extent that such reductions could not reasonably be expected to result in an increase in any “top-up” or “make-whole” or similar payment thereunder, provided that (x) each Engine shall at all times be subject to a minimum build standard in respect of each Part thereof of at least 2,000 cycles and (y) the Company will not remove any Part from an Engine if such Part has at least 2,000 cycles remaining (except as permitted by Section 27(b) hereof). In addition, the Company shall continue to comply with the terms of each such engine maintenance agreement (including making all payments when due thereunder) and not take any action with respect to any credits or equivalents thereof related to any Engine (or permit any action to be taken), if, in the opinion of the Administrative Agent, such action could cause the loss of any economic benefit available under any engine maintenance agreement applicable to such Engine (other than any loss resulting from the performance of maintenance on such engine in accordance with the applicable engine maintenance agreement or as specifically provided in the following sentence). The Company covenants and agrees that to the extent under the GEAE, MTU or any other engine maintenance agreement in effect with respect to any Engine, there is any surplus cash or credit with respect to any Engine after such Engine completes a shop visit and the terms of the engine maintenance agreement applicable to such Engine permit such surplus cash or credit to be allocated to other engines currently being overhauled by such engine maintenance provider pursuant to such agreement, such surplus will first be applied to or for the benefit of any other Engines and, second to the extent any such surplus can not be applied to or for the benefit of any other Engine, to or for the benefit of any other engine. In addition, the Company shall, at no material cost to the Company, assist the Administrative Agent, for the benefit of the Lenders, in obtaining the benefit of the credits or equivalents thereof relating to such Engines in the event that the Administrative Agent acquires possession of the Engines under each such engine maintenance agreement through direct contractual agreements between the Administrative Agent and such engine maintenance provider.

Engine Maintenance. (a) The Company agrees that at A. At all times each of the engines included in the collateral under the Credit Agreement (the “Engines”) Engines will be subject to an engine maintenance agreement with General Electric Aircraft Engines (“"GEAE”"), MTU or such other provider of engine maintenance services as may be acceptable to the Administrative Agent and the Requisite Lenders, in each case in accordance with an engine maintenance agreement that is in form and substance satisfactory to the Administrative Agent and the Requisite Lenders (it being understood and agreed that (x) any engine maintenance agreement with respect to any Engine that is not a “"power by the hour” " engine maintenance agreement or similar agreement that provides for the prepayment of maintenance expense shall not be satisfactory to the Administrative Agent and the Requisite Lenders and (y) the GEAE and MTU engine maintenance agreements as in effect on the date hereof Fifth Restatement Effective Date are satisfactory to the Administrative Agent and the Requisite Lenders). Company will use its commercially reasonable best efforts to enter into new or amended engine maintenance agreements covering the Financed Aircraft and the Engines comprising the Collateral on a power-by-the-hour basis and on terms requiring Company to make monthly payments to the engine maintenance contractor in respect of each engine at the rate of at least $150 per flight hour that such engine was operated during the prior month. Company shall use its commercially reasonable best efforts to have the new engine maintenance agreements provide that (i) the Administrative Agent is a third party beneficiary, (ii) the Administrative Agent has a security interest in the agreements and (iii) the Administrative Agent has the right to step into Company's place should any Engines be returned to the Lenders. Notwithstanding the foregoing, the Company may amend the existing GEAE and MTU engine maintenance agreements to reduce the hourly rate payable thereunder to the extent attributable to demonstrable hourly rate and materials cost savings with the relevant engine maintenance provider (as determined by the Administrative Agent) and to the extent that such reductions could not reasonably be expected to result in an increase in any “top-up” or “make-whole” or similar payment thereunder, provided that (x) each Engine shall at all times be subject to a minimum build standard in respect of each Part thereof of at least 2,000 cycles and (y) the Company will not remove any Part from an Engine if such Part has at least 2,000 cycles remaining (except as permitted by Section 27(b) hereof). In addition, the Company shall continue to comply with the terms of each such engine maintenance agreement (including making all payments when due thereunder) and not take any action with respect to any credits or equivalents thereof related to any Engine (or permit any action to be taken), if, in the opinion of the Administrative Agent, such action could cause the loss of any economic benefit available under any engine maintenance agreement applicable to such Engine (other than any loss resulting from the performance of maintenance on such engine in accordance with the applicable engine maintenance agreement or as specifically provided in the following sentence). The Company covenants and agrees that to the extent under the GEAE, MTU or any other engine maintenance agreement in effect with respect to any Engine, there is any surplus cash or credit with respect to any Engine after such Engine completes a shop visit and the terms of the engine maintenance agreement applicable to such Engine permit such surplus cash or credit to be allocated to other engines currently being overhauled by such engine maintenance provider pursuant to such agreement, such surplus will first be applied to or for the benefit of any other Engines and, second to the extent any such surplus can not be applied to or for the benefit of any other Engine, to or for the benefit of any other engine. In addition, the Company shall, at no material cost to the Company, assist the Administrative Agent, for the benefit of the Lenders, in obtaining the benefit of the credits or equivalents thereof relating to such Engines in the event that the Administrative Agent acquires possession of the Engines under each such engine maintenance agreement through direct contractual agreements between the Administrative Agent and such engine maintenance provider.that

Engine Maintenance. (a) The AFL III and the Company agrees agree that at all times each of the engines included in the collateral under the Credit Agreement (the “Engines”) will be subject to an engine maintenance agreement with General Electric Aircraft Engines (“GEAE”), MTU or such other provider of engine maintenance services as may be acceptable to the Administrative Agent and the Requisite Lenders, in each case in accordance with an engine maintenance agreement that is in form and substance satisfactory to the Administrative Agent and the Requisite Lenders (it being understood and agreed that (x) any engine maintenance agreement with respect to any Engine that is not a “power by the hour” engine maintenance agreement or similar agreement that provides for the prepayment of maintenance expense shall not be satisfactory to the Administrative Agent and the Requisite Lenders and (y) the GEAE and MTU engine maintenance agreements as in effect on the date hereof are satisfactory to the Administrative Agent and the Requisite Lenders). Notwithstanding the foregoing, the Company may amend the existing GEAE and MTU engine maintenance agreements to reduce the hourly rate payable thereunder to the extent attributable to demonstrable hourly rate and materials cost savings with the relevant engine maintenance provider (as determined by the Administrative Agent) and to the extent that such reductions could not reasonably be expected to result in an increase in any “top-up” or “make-whole” or similar payment thereunder, provided that (x) each Engine shall at all times be subject to a minimum build standard in respect of each Part thereof of at least 2,000 cycles and (y) the Company will not remove any Part from an Engine if such Part has at least 2,000 cycles remaining (except as permitted by Section 27(b) hereof). In addition, the Company shall continue to comply with the terms of each such engine maintenance agreement (including making all payments when due thereunder) and not take any action with respect to any credits or equivalents thereof related to any Engine (or permit any action to be taken), if, in the opinion of the Administrative Agent, such action could cause the loss of any economic benefit available under any engine maintenance agreement applicable to such Engine (other than any loss resulting from the performance of maintenance on such engine in accordance with the applicable engine maintenance agreement or as specifically provided in the following sentence). The Company covenants and agrees that to the extent under the GEAE, MTU or any other engine maintenance agreement in effect with respect to any Engine, there is any surplus cash or credit with respect to any Engine after such Engine completes a shop visit and the terms of the engine maintenance agreement applicable to such Engine permit such surplus cash or credit to be allocated to other engines currently being overhauled by such engine maintenance provider pursuant to such agreement, such surplus will first be applied to or for the benefit of any other Engines and, second to the extent any such surplus can not be applied to or for the benefit of any other Engine, to or for the benefit of any other engine. In addition, AFL III and the Company shall, at no material cost to AFL III or the Company, assist the Administrative Agent, for the benefit of the Lenders, in obtaining the benefit of the credits or equivalents thereof relating to such Engines in the event that the Administrative Agent acquires possession of the Engines under each such engine maintenance agreement through direct contractual agreements between the Administrative Agent and such engine maintenance provider.

Engine Maintenance. (ai) The Company agrees that In furtherance of, and not in limitation of anything contained in this Lease or any other Loan Document, at all times each of the engines included in the collateral under the Credit Agreement (the “Engines”) Engines will be subject to an engine maintenance agreement with General Electric Aircraft Engines (“"GEAE”"), MTU or such other provider of engine maintenance services as may be acceptable to the Administrative Agent and the Requisite Lenders, in each case in accordance with an engine maintenance agreement that is in form and substance satisfactory to the Administrative Agent and the Requisite Lenders (it being understood and agreed that (x) any engine maintenance agreement with respect to any Engine that is not a “"power by the hour” " engine maintenance agreement or similar agreement that provides for the prepayment of maintenance expense shall not be satisfactory to the Administrative Agent and the Requisite Lenders and (y) the GEAE and MTU engine maintenance agreements as in effect on the date hereof Restatement Effective Date are satisfactory to the Administrative Agent and the Requisite Lenders). The Lessee will use its commercially reasonable best efforts to enter into new or amended engine maintenance agreements covering the AFL III Aircraft and the Engines comprising the Collateral on a power-by-the-hour basis and on terms requiring the Lessee to make monthly payments to the engine maintenance contractor in respect of each engine at the rate of at least $150 per flight hour that such engine was operated during the prior month. The Lessee shall use its commercially reasonable best efforts to have the new engine maintenance agreements provide that (i) the Agent is a third party beneficiary, (ii) the Agent has a security interest in the agreements and (iii) the Agent has the right to step into the Lessee's place should any Engines be returned to the Lenders. Notwithstanding the foregoing, the Company Lessee may amend the existing GEAE and MTU engine maintenance agreements to reduce the hourly rate payable thereunder to the extent attributable to demonstrable hourly rate and materials cost savings with the relevant engine maintenance provider (as determined by the Administrative Agent) and to the extent that such reductions could not reasonably be expected to result in an increase in any “"top-up” " or “"make-whole” " or similar payment thereunder, provided that (x) each Engine shall at all times be subject to a minimum build standard in respect of each Part thereof of at least 2,000 cycles and (y) the Company Lessee will not remove any Part from an Engine if such Part has at least 2,000 cycles remaining (except as permitted by Section 27(bsubsection 7(i) hereof). In addition, the Company Lessee shall continue to comply with the terms of each such engine maintenance agreement (including making all payments when due thereunder) and not take any action with respect to any credits or equivalents thereof related to any Engine (or permit any action to be taken), if, in the opinion of the Administrative Agent, such action could cause the loss of any economic benefit available under any engine maintenance agreement applicable to such Engine (other than any loss resulting from the performance of maintenance on such engine in accordance with the applicable engine maintenance agreement or as specifically provided in the following sentence). The Company covenants and agrees that to To the extent under the GEAE, MTU or any other engine maintenance agreement in effect with respect to any Engine, there is any surplus cash or credit with respect to any Engine after such Engine completes a shop visit and the terms of the engine maintenance agreement applicable to such Engine permit such surplus cash or credit to be allocated to other engines currently being overhauled by such engine maintenance provider pursuant to such agreement, such surplus will first be applied to or for the benefit of any other Engines and, second to the extent any such surplus can not be applied to or for the benefit of any other Engine, to or for the benefit of any other engine. In addition, the Company Lessee shall, at no material cost to the CompanyLessee, assist the Administrative Agent, for the benefit of the Lenders, in obtaining the benefit of the credits or equivalents thereof relating to such Engines in the event that the Administrative Agent acquires possession of the Engines under each such engine maintenance agreement through direct contractual agreements between the Administrative Agent and such engine maintenance provider. (ii) Sage-Popovich Inc. ("S-P") or such other company as may xx xxxxxxxxx by the Requisite Lenders will be retained by the Lessee as a third party provider to perform the services identified in Schedule 10(h)(ii) attached hereto, S-P will have limited access to the maintenance module of SAP or an equivalent program (with no ability to enter or change data) and the Lessee will provide to S-P such additional documents as S-P reasonably requests from time to time (and not available to S-P as a third-party provider). the Lessee will promptly take such actions as the Agent deems reasonably necessary to resolve each of the outstanding issues raised by S-P's ongoing reviews of the Lessee's maintenance records and procedures (including, without limitation, the resolution of all issues regarding the Lessee's failure to maintain records for each Part constituting Collateral dating back to the date of manufacture of such Part (each such issue, a "BACK-TO-BIRTH TRACEABILITY ISSUE") as provided in the immediately succeeding subclause (iii)). Any dispute concerning any issues raised by S-P shall be resolved by an arbitrator reasonably satisfactory to the Lessee and the Requisite Lenders (it being understood and agreed that a request to resolve any back-to-birth traceability issues with respect to the Collateral in the manner set forth in the immediately succeeding subclause (iii) shall be complied with in accordance with such subclause (iii) and shall not be subject to such dispute resolution provision). the Lessee will pay the reasonable fees and expenses of S-P in connection with such review. (iii) The Lessee will resolve any Back-To-Birth Traceability Issues by the replacement of any Part with an unresolved back-to-birth traceability issue at the next shop visit for such Engine; provided that (i) the Lessee shall not be required to spend more than $3,000,000 during the twelve month period commencing upon November 3, 2003 or any twelve month period thereafter or $8,000,000 in the aggregate on or after July 3, 2003 to replace (x) any Parts and (y) any parts of the engines securing the Credit Agreement, in each case because of back-to-birth traceability issues, (ii) the amounts in the preceding clause (i) shall be net of any salvage value attributable to the removed Parts or parts, as the case may be, and (iii) the cost to replace any Part or part, as the case may be, that is scheduled to be (or otherwise would have been) removed at such shop visit shall not be included in the calculation in clause (i) of this proviso.