Common use of Insurance Against Loss or Damage to the Aircraft Clause in Contracts

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b7.04(b), Lessee the Owner shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) with respect to other aircraft owned or operated by Lessee the Owner (or such SublesseeLessee) on the same routes, except that Lessee the Owner (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to self-insurance to the extent permitted by Section 11(d7.04(d)) not less than the Stipulated 100% of the then aggregate unpaid Principal Amount of the Secured Certificates (the "Loan Loss Value for the AircraftValue"). Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) as an additional insuredsinsured, as their respective interests its interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d7.04(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 5,000,000 (or, if the Aircraft is then under a SubleaseLease, in excess of $2,000,0003,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for aggregate unpaid Principal Amount of the Aircraft Secured Certificates plus all accrued and unpaid interest thereon (the "Balance Due") shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee the Owner (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee whether such payment is made to Lessee the Owner (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Trustee otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Trustee shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Owner or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 5,000,000 (or, if the Aircraft is then under a SubleaseLease, of $2,000,0003,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Owner or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantTrustee, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Trustee or the Owner Participant or Lessee (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantTrustee. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor the Indenture Trustee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor the Indenture Trustee and Lesseethe Owner, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 5,000,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,0003,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 5,000,000 (or, if the Aircraft is then under a Sublease, of $2,000,0003,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) 1. Except as provided in clause (II) paragraph 2 of this Section 11(b)B or Section 4.06(c) of the Trust Indenture, Lessee and subject to the provisions of Section D hereof permitting self-insurance, Owner shall at all times carry and maintain or cause to be maintained in effectcarried and maintained, at its or no expense to any Sublessee's expenseAdditional Insured, in effect with insurers or reinsurers of recognized responsibility, responsibility all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, aircraft hull war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking allied perils insurance, if and to the extent the same is maintained by Lessee Owner (or, if a Sublease is then in effect, by Sublesseeor any Permitted Lessee) with respect to other aircraft owned or leased, and operated by Lessee Owner (or such SublesseePermitted Lessee) on the same routes, except that Lessee (routes or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft maintenance of such insurance is operated on routes where the custom is customary for major international air carriers with comparable route structures flying comparable routes to carry such insurance) which is of similar aircraft on similar routes); provided, that the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such foregoing insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)D) not less than 105% of the Stipulated Loss Value for unpaid Original Amount (the Aircraft“Agreed Value”). Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in In the case of a loss with respect to an Engine engine (other than an Engine) installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) Mortgagee shall arrange for promptly remit any payment made to it of any insurance proceeds in respect of such loss to Owner or any third party that is entitled to receive such proceeds. All losses will be held for adjusted by Owner with the account insurers; provided, however, that during a period when any Event of Lessor (orDefault shall have occurred and be continuing, so long as the Trust Indenture Owner shall not have been dischargedagree to any such adjustment without the consent of the Mortgagee. The insurance payments for any property damage loss to the Airframe or any Engine not constituting an Event of Loss with respect thereto shall be paid, to the Indenture Trusteeextent such proceeds are not paid by the insurer(s) whether such payment is made directly to Lessee the person effecting the repair, as follows: all payments in respect of losses less than or equal to $5,000,000 shall be paid to the Owner (or any SublesseePermitted Lessee if directed by the Owner), and (x) all payments with respect to losses greater than $5,000,000 up to an amount equal to the Agreed Value and (y) all payment with respect to losses received while a Special Default shall have occurred and be continuing, shall be paid to Mortgagee, to be held as collateral security for the Owner’s obligations hereunder, and applied to reimburse the Owner for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacements as directed by the Owner (or any third partyPermitted Lessee if directed by the Owner), it being understood and agreed that in . In the case of any payment to Lessor Mortgagee (or the Indenture Trustee) otherwise other than in respect of an Event of Loss, Lessor (or Loss of the Indenture TrusteeAircraft) Mortgagee shall, upon receipt of evidence reasonably satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being mademade or the replacement of the Engine suffering the Event of Loss, pay the amount of such payment payment, and any interest or income earned thereon, to Lessee the Owner or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:.

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b3.6(b), Lessee the Company shall maintain or cause to be maintained in effect, at its or any Sublessee's Lessee’s expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the relevant Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Company (or, if a Sublease Lease is then in effect, by Sublesseeany Lessee) with respect to other of the same type aircraft owned or operated by Lessee the Company (or such SublesseeLessee) on the same routes, except that Lessee the Company (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the relevant Aircraft) and hijacking insurance if the Aircraft is are operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) the Company of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is are subject to this Lease Mortgage be for an amount (subject to self-insurance to the extent permitted by Section 11(d3.6(d)) not less than the Stipulated Loss Value for amount of insurance of the same type maintained by the Company on the Effective Date with respect to the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall be amended to name Lessorthe Collateral Agent as a loss payee, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d3.6(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if an amount equal to 13.5% of the Appraised Value of the Aircraft is then under a Sublease, in excess subject to such event of $2,000,000)loss, the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for amount of the Aircraft reduction in the Total Revolving Commitments as required by Section 7.5(a)(iii) of the Credit Agreement with respect to such loss (the “Balance Due”), shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent (except in the case of a loss with respect to an Engine installed on an airframe other than the an Airframe, in which case Lessee the Company (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent whether such payment is made to Lessee the Company (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Collateral Agent otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Collateral Agent shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Company or its order, and (B) the entire amount of any loss involving total proceeds of $3,500,000 equal to the amount set forth in clause (or, if the Aircraft is then under a Sublease, of $2,000,000A) above or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Company or its order unless an Event of Default shall have occurred and be continuing and the insurers shall have been notified thereof by Lessor or the Indenture TrusteeCollateral Agent, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantCollateral Agent, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease shall be Lease is in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), respectively, Lease) of written notice by such insurers of such cancellation, lapse or change, ; provided, however, that if any notice period specified above is not reasonably generally obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably generally obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee Secured Creditors (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant Secured Creditors (and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Secured Creditors or the Owner Participant or Lessee Company (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantCollateral Agent. In the case of a loss with respect to an engine (other than an Engine) installed on the an Airframe, Lessor the Collateral Agent shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee the Company or any other third party that is entitled to receive such proceeds. As between Lessor the Collateral Agent and Lesseethe Company, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I1) Except as provided in clause (II2) of this Section 11(b), and subject to the provisions of Section 11(d) permitting self-insurance, Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and fire and extended coverage and all-risk ground and flight coverage of property damage insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (includingincluding aircraft hull war risk, without limitationallied perils, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same any of such aircraft hull war risk, allied perils, governmental confiscation and expropriation and hijacking insurance is generally maintained by Lessee (or, if a Sublease is then in effect, by or any Sublessee) with respect to other aircraft owned owned, leased or operated by Lessee (or such Sublessee) on the same or similar geographic routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times times, while the Aircraft is subject to this Lease Lease, be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) ; and provided further, that all-risk property damage insurance covering Engines and Parts while temporarily removed from the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall not replaced by similar components need be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance obtained only to the extent permitted in Section 11(davailable at reasonable cost (as reasonably determined by Lessee), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe in circumstances which do not constitute an Event of Loss with respect to the Airframe, Lessor shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for the account of to Lessee or any other third party that is entitled to receive such proceeds. Except during a period when a Section 14(a), (b), (f) or (g) Default or an Event of Default has occurred and is continuing, all losses will be adjusted by Lessee with the insurers. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) 1. Except as provided in clause (II) paragraph 2 of this Section 11(b)B or Section 4.06(c) of the Trust Indenture, Lessee and subject to the provisions of Section D hereof permitting self-insurance, Owner shall at all times carry and maintain or cause to be maintained in effectcarried and maintained, at its or no expense to any Sublessee's expenseAdditional Insured, in effect with insurers or reinsurers of recognized responsibility, responsibility all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground [Trust Indenture and flight coverage of Mortgage (NXXXUA)] aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, aircraft hull war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking allied perils insurance, if and to the extent the same is maintained by Lessee Owner (or, if a Sublease is then in effect, by Sublesseeor any Permitted Lessee) with respect to other aircraft owned or leased, and operated by Lessee Owner (or such SublesseePermitted Lessee) on the same routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such foregoing insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)D) not less than 100% of the Stipulated Loss Value for unpaid Original Amount of the Aircraft. Any policies carried in accordance Series A Equipment Notes together with this paragraph six months of interest accrued thereon (b) the “Agreed Value”); provided, that such all-risk property damage insurance covering Parts while temporarily removed from the Aircraft and or any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall Engine need be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance obtained only to the extent permitted in Section 11(davailable at a reasonable cost (as reasonably determined by the Owner), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in . In the case of a loss with respect to an Engine engine (other than an Engine) installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) Mortgagee shall arrange for promptly remit any payment made to it of any insurance proceeds in respect of such loss to Owner or any third party that is entitled to receive such proceeds. All losses will be held for adjusted by Owner with the account insurers; provided, however, that during a period when any Special Default or Event of Lessor (orDefault shall have occurred and be continuing, so long as the Trust Indenture Owner shall not have been dischargedagree to any such adjustment without the consent of the Mortgagee. The insurance payments for any property damage loss to the Airframe or any Engine not constituting an Event of Loss with respect thereto shall be paid, to the Indenture Trusteeextent such proceeds are not paid by the insurer(s) whether such payment is made directly to Lessee the person effecting the repair, as follows: all payments in respect of losses less than or equal to $5,000,000 shall be paid to the Owner (or any SublesseePermitted Lessee if directed by the Owner), and (x) all payments with respect to losses greater than $5,000,000 up to an amount equal to the Agreed Value and (y) all payments with respect to losses received while a Special Default or Event of Default shall have occurred and be continuing, shall be paid to Mortgagee, to be held as collateral security for the Owner’s obligations hereunder, and, to the extent not theretofore applied as provided in the Trust Indenture, applied to reimburse the Owner for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacements as directed by the Owner (or any third partyPermitted Lessee if directed by the Owner), it being understood and agreed that in . In the case of any payment to Lessor Mortgagee (or the Indenture Trustee) otherwise other than in respect of an Event of Loss, Lessor (or Loss of the Indenture TrusteeAircraft) Mortgagee shall, upon receipt of evidence reasonably satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being mademade or the replacement of the Engine suffering the Event of Loss, pay the amount of such payment payment, and, to Lessee the extent not theretofore applied as provided in the Trust Indenture, any interest or income earned thereon, to the Owner or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:.

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b3.6(b), Lessee the Company shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the relevant Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Company (or, if a Sublease Lease is then in effect, by Sublesseeany Lessee) with respect to other of the same type aircraft owned or operated by Lessee the Company (or such SublesseeLessee) on the same routes, except that Lessee the Company (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the relevant Aircraft) and hijacking insurance if the Aircraft is are operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) the Company of the same type as the Aircraft; provided PROVIDED that such insurance shall at all times while the Aircraft is are subject to this Lease Mortgage be for an amount (subject to self-insurance to the extent permitted by Section 11(d3.6(d)) not less than the Stipulated Loss Value for amount of insurance of the same type maintained by the Company on the Temporary Amendment Effective Date with respect to the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall be amended to name Lessorthe Collateral Agent as a loss payee, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d3.6(d), (iii) shall provide that (A) in the event Event of a loss Loss involving proceeds in excess of $3,500,000 (or, if an amount equal to 13.5% of the Appraised Value of the Aircraft is then under a Sublease, in excess subject to such Event of $2,000,000)Loss, the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for amount of the Aircraft prepayment required by Section 4.02(e) of the Credit Agreement with respect to such loss (the "BALANCE DUE"), shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent (except in the case of a loss with respect to an Engine installed on an airframe other than the an Airframe, in which case Lessee the Company (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent whether such payment is made to Lessee the Company (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Collateral Agent otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Collateral Agent shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Company or its order, and (B) the entire amount of any loss involving total proceeds of $3,500,000 equal to the amount set forth in clause (or, if the Aircraft is then under a Sublease, of $2,000,000A) above or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Company or its order unless an Event of Default shall have occurred and be continuing and the insurers shall have been notified thereof by Lessor or the Indenture TrusteeCollateral Agent, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantCollateral Agent, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease shall be Lease is in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), respectively, Lease) of written notice by such insurers of such cancellation, lapse or change; PROVIDED, provided, howeverHOWEVER, that if any notice period specified above is not reasonably generally obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably generally obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee Secured Creditors (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant Secured Creditors (and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Secured Creditors or the Owner Participant or Lessee Company (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantCollateral Agent. In the case of a loss with respect to an engine (other than an Engine) installed on the an Airframe, Lessor the Collateral Agent shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee the Company or any other third party that is entitled to receive such proceeds. As between Lessor the Collateral Agent and Lesseethe Company, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I1) Except as provided in clause (II2) of this Section 11(b4.03(b), Lessee and subject to the provisions of Section 4.03(d) hereof permitting self-insurance, Owner shall maintain or cause to be maintained in effect, at its or any SublesseePermitted Lessee's expense, with insurers of recognized reputation and responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and fire and extended coverage and all-risk ground and flight coverage of aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, aircraft war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee Owner (or, if a Sublease is then in effect, by Sublesseeor any Permitted Lessee) with respect to other aircraft owned or leased, and operated by Lessee Owner (or such SublesseePermitted Lessee) on the same routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Agreement be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)4.03(d) hereof) not less than the Stipulated Loss Value Insured Amount for the Aircraft. Any policies carried in accordance ; and provided further, that subject to compliance with this paragraph Section 4.03(d) hereof, such all-risk property damage insurance covering Engines and Parts while temporarily removed from the Airframe or an airframe of (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to Parts) an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to need be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) obtained only to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participantavailable at reasonable cost (as reasonably determined by Owner). In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe in circumstances which do not constitute an Event of Loss with respect to the Airframe, Lessor the Indenture Trustee shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for the account of Lessee to Owner or any other third party that is entitled to receive such proceeds. All losses will be adjusted by Owner with the insurers; provided, however, that during a period when any Indenture Event of Default shall have occurred and be continuing, Owner shall not agree to any such adjustment without the consent of the Indenture Trustee. As between Lessor the Indenture Trustee and LesseeOwner, it is agreed that all proceeds of insurance payments maintained in compliance with the preceding paragraph and received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I1) Except as provided in clause (II2) of this Section 11(b4.03(b), Lessee and subject to the provisions of Section 4.03(d) hereof permitting self-insurance, Owner shall maintain or cause to be maintained in effect, at its or any SublesseePermitted Lessee's expense, with insurers of recognized reputation and responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and fire and extended coverage and all-risk ground and flight coverage of aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, aircraft war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee Owner (or, if a Sublease is then in effect, by Sublesseeor any Permitted Lessee) with respect to other aircraft owned or leased, and operated by Lessee Owner (or such SublesseePermitted Lessee) on the same routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Agreement be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)4.03(d) hereof) not less than the Stipulated Loss Value Insured Amount for the Aircraft. Any policies carried in accordance ; and provided further, that subject to compliance with this paragraph Section 4.03(d) hereof, such all-risk property damage insurance covering Engines and Parts while temporarily removed from the Airframe or an airframe of (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to Parts) an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to need be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) obtained only to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participantavailable at reasonable cost (as reasonably determined by Owner). In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe in circumstances which do not constitute an Event of Loss with respect to the Airframe, Lessor the Indenture Trustee shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for the account of Lessee to Owner or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:.

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), The Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's own expense, with insurers of recognized responsibility, reputation and responsibility and reasonably satisfactory to the Lessor: (A) all-risk ground ground, taxiing and flight aircraft hull insurance covering the Aircraft Aircraft; (B) all risk spare parts and all-risk ground and flight engines coverage of Engines and (including transit) with respect to any Engines, Propellers or Parts while temporarily removed from an Aircraft while such items are not installed on the Aircraft and are not replaced insured by similar components the Aircraft hull and risk insurance; (includingC) limited war risk perils covering hijacking (air piracy), without limitationand (D) at the reasonable request of Lessor, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking related insurance, if and but only to the extent the same (i) such insurance is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of routes as the Aircraft, or (ii) and hijacking insurance if the Aircraft is operated on routes where the custom in the United States airline industry is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable insurance with respect to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of on the same type routes as the Aircraft; provided that . All such insurance shall be in full force and effect throughout any geographical areas at all times while any time traversed by the Aircraft is subject to this Lease Aircraft, shall be payable in dollars in the United States and shall during the Term hereof be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the such Aircraft. Any hull insurance carried in accordance with this Section 12.2 may contain a provision for a deductible or self-insurance which complies with industry standards. Any policies carried in accordance with this paragraph (b) Section 12.2 covering the Aircraft and any policies taken out in substitution or replacement for any such policies policies: (i1) shall name Lessor, the Lessor as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear loss payee (but without imposing on Lessor any such party obligations imposed upon the insured, including without limitation the liability to pay premiums with respect to such insurancepremiums), ; (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv2) shall provide that if the insurers cancel such insurance is canceled or materially changed for any reason whatever, or such insurance lapses the same is allowed to lapse for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participantpremium, such cancellation, change or lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) Lessor for thirty (30) days (seven (7) days in after receipt by the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, Lessor of written notice by such insurers of such cancellation, cancellation or lapse or changematerial change in policy terms and conditions (other than war risk insurance, provided, however, that if any in which case seven days' notice period specified above is not reasonably obtainable, such policies shall be given); (3) shall provide that losses shall be adjusted with the Lessor and Lessee as their interests may appear and be payable to Lessor in the event of any damage or loss, for as long a period any one occurrence, in excess of prior notice as shall then be reasonably obtainable, $1,000,000 (vwithout consideration of any deductible); (4) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) Lessor in such policies the insurance shall not be invalidated by any action or inaction of the Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, Lessor regardless of any breach or violation of any warrantywarranties, declaration declarations or condition conditions contained in such policies by the Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from or any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee person; (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii5) shall waive any right of subrogation set-off, counterclaim or other deduction against each insured; (6) shall be primary without right of contribution from any insurance which is carried by the insurers against Lessor, the Owner Participant and the Indenture Trustee and; (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii7) shall waive any right and all rights of subrogation which the insurers have or may acquire against Lessor. The Lessee shall arrange for evidence of appropriate coverage for each Aircraft and to the satisfaction of the insurers requirements set forth above to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) be given to the extent of any moneys due to Lessor, Lessor on or before the Indenture Trustee or the Owner ParticipantDelivery Date for each Aircraft by its insurance broker. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:12.3

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided PROVIDED that such insurance shall at all times while the Aircraft is subject to this Lease be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of [$3,500,000 5,000,000 for A319's and 757's] [$7,000,000 for 747's] (or, if the Aircraft is then under a Sublease, in excess of [$2,000,0003,000,000 for A319's and 757's] [$4,000,000 for 747's]), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of [$3,500,000 5,000,000 for A319's and 757's] [$7,000,000 for 747's] (or, if the Aircraft is then under a Sublease, of [$2,000,0003,000,000 for A319's and 757's] [$4,000,000 for 747's]) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, providedPROVIDED, howeverHOWEVER, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I1) Except as provided in clause (II2) of this Section 11(bsubsection (b), Lessee and subject to the provisions of subsection (d) of this Exhibit B permitting the self-insurance, Owner shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of nationally or internationally recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and fire and extended coverage and all-risk ground and flight coverage of aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraftcomponents; provided that such insurance shall at all times while the Aircraft is subject to this Lease the Lien of the Indenture be for an amount (subject to taking into account the self-insurance to the extent permitted by Section 11(d)subsection (d) of this Exhibit B) not less than the Stipulated Loss Value for amount payable under Section 5.06(a) upon the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect occurrence of an Event of Loss; provided further, Lessor that, subject to compliance with subsection (or the Indenture Trusteed) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (this Exhibit B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse all-risk property damage insurance covering Engines and Parts temporarily removed from an Airframe or change shall not be effective as to Lessor, the Indenture Trustee an airframe or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverageParts) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall an Engine need be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) obtained only to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participantavailable at reasonable cost (as reasonably determined by Owner). In the case of a loss with respect to an engine (other than an Engine) installed on the airframe in circumstances which do not constitute an Event of Loss with respect to the Airframe, Lessor the Indenture Trustee shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for the account of Lessee to Owner or any other third party that is entitled to receive such proceeds. Unless an Event of Default has occurred and is continuing, all losses will be adjusted by Owner with the insurers. As between Lessor the Indenture Trustee and LesseeOwner, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b3.6(b), Lessee the Company shall maintain or cause to be maintained in effect, at its or any Sublessee's Lessee’s expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Company (or, if a Sublease Lease is then in effect, by Sublesseeany Lessee) with respect to other aircraft owned or operated by Lessee the Company (or such SublesseeLessee) on the same routes, except that Lessee the Company (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance, or if the Company (or any Lessee) shall at any time operate the Aircraft, the Airframe or any Engine in any war zone or area of recognized or threatened hostilities) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) the Company of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Mortgage be for an amount (subject to self-insurance to the extent permitted by Section 11(d3.6(d)) not less than 100% of the Stipulated then aggregate outstanding principal amount of the Notes (the “Loan Loss Value for the AircraftValue”). Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall be amended to name Lessorthe Collateral Agent as an additional insured, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d3.6(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a SubleaseLease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for aggregate outstanding principal amount of the Aircraft Notes, plus all accrued and unpaid interest thereon and any other Obligations (including any Obligation arising under Section 8.4(c) of the Credit Agreement) then due and payable (the “Balance Due”), shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee the Company (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent whether such payment is made to Lessee the Company (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Collateral Agent otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Collateral Agent shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Company or its order, and (B) the entire amount of any loss involving total proceeds of $3,500,000 (or, if the Aircraft is then under a SubleaseLease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Company or its order unless an Event of Default shall have occurred and be continuing and the insurers shall have been notified thereof by Lessor or the Indenture TrusteeCollateral Agent, (iv) shall provide that, except to the extent not provided for by the Company’s hull war risk and hijacking insurance provider in the event that the Company maintains hull war risk and hijacking insurance, if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantCollateral Agent, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease shall be Lease is in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), respectively, Lease) of written notice by such insurers of such cancellation, lapse or change, ; provided, however, that if any notice period specified above is not reasonably generally obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably generally obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant Collateral Agent or the Indenture Trustee Noteholders (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant Collateral Agent or the Noteholders (and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Collateral Agent or the Owner Participant Noteholders or Lessee the Company (or any SublesseeLessee) to the extent of any moneys due to Lessorthe Collateral Agent. To the extent that the Company maintains hull war risk and hijacking insurance and the Company’s hull war risk and hijacking insurance provider does not provide for the provision of direct notice to the Collateral Agent of cancellation, material change or lapse in the insurance required hereunder, the Indenture Trustee Company hereby agrees that upon receipt of notice of any thereof from such insurance provider it shall give the Collateral Agent immediate notice of each cancellation or the Owner Participantlapse of, or material change to, such insurance. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor the Collateral Agent shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee the Company or any other third party that is entitled to receive such proceeds. As between Lessor the Collateral Agent and Lesseethe Company, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided PROVIDED that such insurance shall at all times while the Aircraft is subject to this Lease be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, providedPROVIDED, howeverHOWEVER, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:: (x) if such payments are received with respect to the Airframe (or the Airframe and the Engines installed thereon), (i) unless such property is replaced pursuant to the last paragraph of Section 10(a), so much of such payments remaining, after reimbursement of Lessor (as provided in Section 7.01 of the Trust Agreement) for reasonable costs and expenses, as shall not exceed the Stipulated Loss Value required to be paid by Lessee pursuant to Section 10(a) hereof shall be applied in reduction of Lessee's obligation to pay such Stipulated Loss Value, if not already paid by Lessee, or, if already paid by Lessee, shall be applied to reimburse Lessee for its payment of such Stipulated Loss Value, and the balance, if any, of such payments remaining thereafter will be paid over to, or retained by, Lessee (or if directed by Lessee, any Sublessee); or (ii) if such property is replaced pursuant to the last paragraph of Section 10(a), such payments shall be paid over to, or retained by, Lessee (or if directed by Lessee, any Sublessee), PROVIDED that Lessee shall have fully performed, or concurrently therewith will fully perform, the terms of the last paragraph of Section 10(a) with respect to the Event of Loss for which such payments are made; and

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b7.04(b), Lessee the Owner shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) with respect to other aircraft owned or operated by Lessee the Owner (or such SublesseeLessee) on the same routes, except that Lessee the Owner (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as -43- from time to time applicable to aircraft owned or operated by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to self-insurance to the extent permitted by Section 11(d7.04(d)) not less than the Stipulated 100% of the then aggregate unpaid Principal Amount of the Secured Certificates (the "Loan Loss Value for the AircraftValue"). Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) as an additional insuredsinsured, as their respective interests its interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d7.04(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of [$3,500,000 5,000,000 for A319's and 757's] [$7,000,000 for 747's] (or, if the Aircraft is then under a SubleaseLease, in excess of [$2,000,0003,000,000 for A319's and 757's] [$4,000,000 for 747's]), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for aggregate unpaid Principal Amount of the Aircraft Secured Certificates plus all accrued and unpaid interest thereon (the "Balance Due") shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee the Owner (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee whether such payment is made to Lessee the Owner (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Trustee otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Trustee shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Owner or its order, and (B) the entire amount of any loss involving proceeds of [$3,500,000 5,000,000 for A319's and 757's] [$7,000,000 for 747's] (or, if the Aircraft is then under a SubleaseLease, of [$2,000,0003,000,000 for A319's and 757's] [$4,000,000 for 747's]) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Owner or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantTrustee, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease Lease shall be in effect, Lessee the -44- Owner in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Trustee or the Owner Participant or Lessee (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantTrustee. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor the Indenture Trustee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor the Indenture Trustee and Lesseethe Owner, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 7,000,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,0004,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 7,000,000 (or, if the Aircraft is then under a Sublease, of $2,000,0004,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b7.04(b), Lessee the Owner shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) with respect to other aircraft owned or operated by Lessee the Owner (or such SublesseeLessee) on the same routes, except that Lessee the Owner (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to self-insurance to the extent permitted by Section 11(d7.04(d)) not less than the Stipulated 100% of the then aggregate unpaid Principal Amount of the Secured Certificates (the "Loan Loss Value for the AircraftValue"). Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) as an additional insuredsinsured, as their respective interests its interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d7.04(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a SubleaseLease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for aggregate unpaid Principal Amount of the Aircraft Secured Certificates plus all accrued and unpaid interest thereon (the "Balance Due") shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee the Owner (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee whether such payment is made to Lessee the Owner (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Trustee otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Trustee shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Owner or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a SubleaseLease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Owner or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantTrustee, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Trustee or the Owner Participant or Lessee (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantTrustee. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor the Indenture Trustee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor the Indenture Trustee and Lesseethe Owner, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b7.04(b), Lessee the Owner shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) with respect to other aircraft owned or operated by Lessee the Owner (or such SublesseeLessee) on the same routes, except that Lessee the Owner (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to self-insurance to the extent permitted by Section 11(d7.04(d)) not less than the Stipulated 100% of the then aggregate unpaid Principal Amount of the Secured Certificates (the "Loan Loss Value for the AircraftValue"). Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) as an additional insuredsinsured, as their respective interests its interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d7.04(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 7,000,000 (or, if the Aircraft is then under a SubleaseLease, in excess of $2,000,0004,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for aggregate unpaid Principal Amount of the Aircraft Secured Certificates plus all accrued and unpaid interest thereon (the "Balance Due") shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee the Owner (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee whether such payment is made to Lessee the Owner (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Trustee otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Trustee shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Owner or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 7,000,000 (or, if the Aircraft is then under a SubleaseLease, of $2,000,0004,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Owner or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantTrustee, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Trustee or the Owner Participant or Lessee (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantTrustee. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor the Indenture Trustee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor the Indenture Trustee and Lesseethe Owner, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b7.04(b), Lessee the Owner shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) with respect to other aircraft owned or operated by Lessee the Owner (or such SublesseeLessee) on the same routes, except that Lessee the Owner (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to self-insurance to the extent permitted by Section 11(d7.04(d)) not less than the Stipulated 105% of the then aggregate unpaid Principal Amount of the Secured Certificates (the "Loan Loss Value for the AircraftValue"). Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) as an additional insuredsinsured, as their respective interests its interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d7.04(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of [$3,500,000 5,000,000 for 757] [$7,000,000 for A330] (or, if the Aircraft is then under a SubleaseLease, in excess of [$2,000,0003,000,000 for 757] [$4,000,000 for A330]), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for aggregate unpaid Principal Amount of the Aircraft Secured Certificates plus all accrued and unpaid interest thereon (the "Balance Due") shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee the Owner (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee whether such payment is made to Lessee the Owner (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Trustee otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Trustee shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Owner or its order, and (B) the entire amount of any loss involving proceeds of [$3,500,000 5,000,000 for 757] [$7,000,000 for A330] (or, if the Aircraft is then under a SubleaseLease, of [$2,000,0003,000,000 for 757] [$4,000,000 for A330]) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Owner or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantTrustee, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Trustee or the Owner Participant or Lessee (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantTrustee. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor the Indenture Trustee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor the Indenture Trustee and Lesseethe Owner, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of [$3,500,000 5,000,000 for 757] [$7,000,000 for A330] (or, if the Aircraft is then under a Sublease, in excess of [$2,000,0003,000,000 for 757] [$4,000,000 for A330]), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of [$3,500,000 5,000,000 for 757] [$7,000,000 for A330] (or, if the Aircraft is then under a Sublease, of [$2,000,0003,000,000 for 757] [$4,000,000 for A330]) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) 1. Except as provided in clause (II) paragraph 2 of this Section 11(b)B or Section 4.06(c) of the Trust Indenture, Lessee and subject to the provisions of Section D hereof permitting self-insurance, Owner shall at all times carry and maintain or cause to be maintained in effectcarried and maintained, at its or no expense to any Sublessee's expenseAdditional Insured, in effect with insurers or reinsurers of recognized responsibility, responsibility all-risk ground aircraft [Trust Indenture and flight aircraft Mortgage (NXXXUA)] hull insurance covering the Aircraft and all-risk ground and flight coverage of aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, aircraft hull war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking allied perils insurance, if and to the extent the same is maintained by Lessee Owner (or, if a Sublease is then in effect, by Sublesseeor any Permitted Lessee) with respect to other aircraft owned or leased, and operated by Lessee Owner (or such SublesseePermitted Lessee) on the same routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such foregoing insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)D) not less than 100% of the Stipulated Loss Value for unpaid Original Amount of the Aircraft. Any policies carried in accordance Series A Equipment Notes and Series B Equipment Notes together with this paragraph six months of interest accrued thereon (b) the “Agreed Value”); provided, that such all-risk property damage insurance covering Parts while temporarily removed from the Aircraft and or any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall Engine need be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance obtained only to the extent permitted in Section 11(davailable at a reasonable cost (as reasonably determined by the Owner), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in . In the case of a loss with respect to an Engine engine (other than an Engine) installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) Mortgagee shall arrange for promptly remit any payment made to it of any insurance proceeds in respect of such loss to Owner or any third party that is entitled to receive such proceeds. All losses will be held for adjusted by Owner with the account insurers; provided, however, that during a period when any Special Default or Event of Lessor (orDefault shall have occurred and be continuing, so long as the Trust Indenture Owner shall not have been dischargedagree to any such adjustment without the consent of the Mortgagee. The insurance payments for any property damage loss to the Airframe or any Engine not constituting an Event of Loss with respect thereto shall be paid, to the Indenture Trusteeextent such proceeds are not paid by the insurer(s) whether such payment is made directly to Lessee the person effecting the repair, as follows: all payments in respect of losses less than or equal to $5,000,000 shall be paid to the Owner (or any SublesseePermitted Lessee if directed by the Owner), and (x) all payments with respect to losses greater than $5,000,000 up to an amount equal to the Agreed Value and (y) all payments with respect to losses received while a Special Default or Event of Default shall have occurred and be continuing, shall be paid to Mortgagee, to be held as collateral security for the Owner’s obligations hereunder, and, to the extent not theretofore applied as provided in the Trust Indenture, applied to reimburse the Owner for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacements as directed by the Owner (or any third partyPermitted Lessee if directed by the Owner), it being understood and agreed that in . In the case of any payment to Lessor Mortgagee (or the Indenture Trustee) otherwise other than in respect of an Event of Loss, Lessor (or Loss of the Indenture TrusteeAircraft) Mortgagee shall, upon receipt of evidence reasonably satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being mademade or the replacement of the Engine suffering the Event of Loss, pay the amount of such payment payment, and, to Lessee the extent not theretofore applied as provided in the Trust Indenture, any interest or income earned thereon, to the Owner or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:.

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), Lessee Sublessee shall maintain or cause to be maintained in effect, effect at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained unless otherwise agreed by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the AircraftSublessor); provided that such insurance shall at all times while the Aircraft is subject to this Lease Sublease be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Sublessor, Head Lessor, in its individual capacity and as owner trustee, the Indenture Trustee trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000)***, the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as or at the Trust Indenture shall not have been discharged, the Indenture Trustee) direction of Sublessor (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) Sublessee shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Sublessor whether such payment is made to Lessee (or any Sublessee) Sublessee or any third party), it being understood and agreed that in the case of any payment to Lessor (Sublessor or the Indenture Trustee) its designee otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Sublessor shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay pay, or exercise such rights as it may have to cause to be paid, the amount of such payment to Lessee Sublessee or its order, order and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) *** or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee Sublessee or its order unless (x) a Default or an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Sublessor, Head Lessor or (y) an Event of Default (as such term is defined in the Indenture TrusteeHead Lease) shall have occurred and be continuing and the insurers have been notified thereof by Sublessor, Head Lessor, (iviii) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Sublessor, Head Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Sublessor, Head Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to LessorSublessor, the Indenture Trustee Head Lessor or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease)Participant, respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (viv) shall provide that in respect of the respective interests of LessorSublessor, the Indenture Trustee Head Lessor and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) Sublessee or any other Person and shall insure the respective interests of LessorSublessor, the Indenture Trustee Head Lessor and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease)Participant, as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (viv) shall be primary without any right of contribution from any other insurance which is carried by LessorSublessor, Head Lessor or the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease)Participant, (viivi) shall waive any right of subrogation of the insurers against LessorSublessor, Head Lessor and the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease)Participant, and (viiivii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Sublessor, Head Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) Sublessee to the extent of any moneys due to Lessor, the Indenture Trustee Sublessor or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor Sublessor or its designee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee Sublessee or any other third party that is entitled to receive such proceeds. As between Lessor Sublessor and LesseeSublessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b7.04(b), Lessee the Owner shall maintain or cause to be maintained in effect, at its or any Sublessee's Lessee’s expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) with respect to other aircraft owned or operated by Lessee the Owner (or such SublesseeLessee) on the same routes, except that Lessee the Owner (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to self-insurance to the extent permitted by Section 11(d7.04(d)) not less than the Stipulated 105% of the then aggregate unpaid Principal Amount of the Secured Certificates (the “Loan Loss Value for the AircraftValue”). Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) as an additional insuredsinsured, as their respective interests its interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d7.04(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a SubleaseLease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for aggregate unpaid Principal Amount of the Aircraft Secured Certificates plus all accrued and unpaid interest thereon (the “Balance Due”) shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee the Owner (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee whether such payment is made to Lessee the Owner (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Trustee otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Trustee shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Owner or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a SubleaseLease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Owner or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that, except to the extent not provided for by the FAA or other instrumentality of the government of the United States in the event that the Owner maintains war risk and hijacking insurance with the FAA or such instrumentality, if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantTrustee, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Trustee or the Owner Participant or Lessee (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee. To the extent the Owner maintains hull war risk and hijacking insurance with the FAA or other instrumentality of the government of the United States and the FAA or such instrumentality does not provide for the provision of direct notice to the Indenture Trustee of cancellation, material change or lapse in the insurance required hereunder, the Owner Participanthereby agrees that upon receipt of notice of any thereof from the FAA or such instrumentality it shall give the Indenture Trustee immediate notice of each cancellation or lapse of, or material change to, such insurance. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor the Indenture Trustee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor the Indenture Trustee and Lesseethe Owner, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I1) Except as provided in clause (II2) of this Section 11(b), and subject to the provisions of Section 11(d) hereof permitting self-insurance, Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized reputation and responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and fire, and extended coverage and all-risk ground and flight coverage of aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, aircraft war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by or any Sublessee) with respect to other aircraft owned or leased, and operated by Lessee (or such Sublessee) on the same routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)) hereof) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance ; and provided further, that subject to compliance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d)) hereof, such all-risk property damage insurance covering Engines and Parts while temporarily removed from the Airframe or an airframe of (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to Parts) an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to need be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) obtained only to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participantavailable at reasonable cost (as reasonably determined by Lessee). In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe in circumstances which do not constitute an Event of Loss with respect to the Airframe, Lessor shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for the account of to Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and LesseeAll losses will be adjusted by Lessee with the insurers giving due regard to Lessor's and, it is agreed that all insurance payments received so long as the result Lien of the occurrence of Trust Indenture shall not be discharged, the Indenture Trustee's interest, provided, however, that during a period when a Section 14(a), (b), (f) or (g) Default or an Event of Loss will be applied as follows:Default has occurred and is continuing, Lessee

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b3.6(b), Lessee the Company shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the relevant Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Company (or, if a Sublease Lease is then in effect, by Sublesseeany Lessee) with respect to other of the same type aircraft owned or operated by Lessee the Company (or such SublesseeLessee) on the same routes, except that Lessee the Company (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the relevant Aircraft) and hijacking insurance if the Aircraft is are operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) the Company of the same type as the Aircraft; provided PROVIDED that such insurance shall at all times while the Aircraft is are subject to this Lease Mortgage be for an amount (subject to self-insurance to the extent permitted by Section 11(d3.6(d)) not less than the Stipulated Loss Value for amount of insurance of the same type maintained by the Company on the Effective Date with respect to the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall be amended to name Lessorthe Collateral Agent as a loss payee, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d3.6(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if an amount equal to 13.5% of the Appraised Value of the Aircraft is then under a Sublease, in excess subject to such event of $2,000,000)loss, the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for amount of the Aircraft prepayment required by Section 3.02(d) of the Credit Agreement with respect to such loss (the "BALANCE DUE"), shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent (except in the case of a loss with respect to an Engine installed on an airframe other than the an Airframe, in which case Lessee the Company (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent whether such payment is made to Lessee the Company (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Collateral Agent otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Collateral Agent shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Company or its order, and (B) the entire amount of any loss involving total proceeds of $3,500,000 equal to the amount set forth in clause (or, if the Aircraft is then under a Sublease, of $2,000,000A) above or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Company or its order unless an Event of Default shall have occurred and be continuing and the insurers shall have been notified thereof by Lessor or the Indenture TrusteeCollateral Agent, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantCollateral Agent, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease shall be Lease is in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), respectively, Lease) of written notice by such insurers of such cancellation, lapse or change; PROVIDED, provided, howeverHOWEVER, that if any notice period specified above is not reasonably generally obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably generally obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee Secured Creditors (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant Secured Creditors (and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Secured Creditors or the Owner Participant or Lessee Company (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantCollateral Agent. In the case of a loss with respect to an engine (other than an Engine) installed on the an Airframe, Lessor the Collateral Agent shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee the Company or any other third party that is entitled to receive such proceeds. As between Lessor the Collateral Agent and Lesseethe Company, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) 1. Except as provided in clause (II) paragraph 2 of this Section 11(b)B or Section 4.06(c) of the Trust Indenture, Lessee and subject to the provisions of Section D hereof permitting self-insurance, Owner shall at all times carry and maintain or cause to be maintained in effectcarried and maintained, at its or no expense to any Sublessee's expenseAdditional Insured, in effect with insurers or reinsurers of recognized responsibility, responsibility all-risk ground [Trust Indenture and flight Mortgage (NXXXUA)] aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, aircraft hull war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking allied perils insurance, if and to the extent the same is maintained by Lessee Owner (or, if a Sublease is then in effect, by Sublesseeor any Permitted Lessee) with respect to other aircraft owned or leased, and operated by Lessee Owner (or such SublesseePermitted Lessee) on the same routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such foregoing insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)D) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies sum of (i) shall name Lessor, as owner trustee, 100% of the Indenture Trustee unpaid Original Amount of the Series A Equipment Notes and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums Series B Equipment Notes together with respect to such insurance), six months of interest accrued thereon and (ii) may provide for self105% of the unpaid Original Amount of the Series C Equipment Notes (the “Agreed Value”); provided, that such all-risk property damage insurance covering Parts while temporarily removed from the Aircraft or any Engine need be obtained only to the extent permitted in Section 11(davailable at a reasonable cost (as reasonably determined by the Owner), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in . In the case of a loss with respect to an Engine engine (other than an Engine) installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) Mortgagee shall arrange for promptly remit any payment made to it of any insurance proceeds in respect of such loss to Owner or any third party that is entitled to receive such proceeds. All losses will be held for adjusted by Owner with the account insurers; provided, however, that during a period when any Special Default or Event of Lessor (orDefault shall have occurred and be continuing, so long as the Trust Indenture Owner shall not have been dischargedagree to any such adjustment without the consent of the Mortgagee. The insurance payments for any property damage loss to the Airframe or any Engine not constituting an Event of Loss with respect thereto shall be paid, to the Indenture Trusteeextent such proceeds are not paid by the insurer(s) whether such payment is made directly to Lessee the person effecting the repair, as follows: all payments in respect of losses less than or equal to $5,000,000 shall be paid to the Owner (or any SublesseePermitted Lessee if directed by the Owner), and (x) all payments with respect to losses greater than $5,000,000 up to an amount equal to the Agreed Value and (y) all payments with respect to losses received while a Special Default or Event of Default shall have occurred and be continuing, shall be paid to Mortgagee, to be held as collateral security for the Owner’s obligations hereunder, and, to the extent not theretofore applied as provided in the Trust Indenture, applied to reimburse the Owner for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacements as directed by the Owner (or any third partyPermitted Lessee if directed by the Owner), it being understood and agreed that in . In the case of any payment to Lessor Mortgagee (or the Indenture Trustee) otherwise other than in respect of an Event of Loss, Lessor (or Loss of the Indenture TrusteeAircraft) Mortgagee shall, upon receipt of evidence reasonably satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being mademade or the replacement of the Engine suffering the Event of Loss, pay the amount of such payment payment, and, to Lessee the extent not theretofore applied as provided in the Trust Indenture, any interest or income earned thereon, to the Owner or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:.

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), Lessee Sublessee shall maintain or cause to be maintained in effect, effect at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained unless otherwise agreed by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the AircraftSublessor); provided that such insurance shall at all times while the Aircraft is subject to this Lease Sublease be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Sublessor, Head Lessor, in its individual capacity and as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000)250,000, the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor or at the direction of Sublessor (orincluding, so long as the Trust Indenture shall not have been discharged, to the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) Sublessee shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor Sublessor (or, so long as the Trust Indenture shall not have been discharged, to the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) Sublessee or any third party), it being understood and agreed that in the case of any payment to Lessor Sublessor or its designee (or including the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Sublessor shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay pay, or exercise such rights as it may have to cause to be paid, the amount of such payment to Lessee Sublessee or its order, order and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) 250,000 or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee Sublessee or its order unless (x) a Default or an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Sublessor, Head Lessor or the Indenture Trustee or (y) an Event of Default (as such term is defined in the Head Lease) shall have occurred and be continuing and the insurers have been notified thereof by Sublessor, Head Lessor or the Indenture Trustee, (iviii) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Sublessor, Head Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Sublessor, Head Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Sublessor, Head Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease)Participant, respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (viv) shall provide that in respect of the respective interests of Sublessor, Head Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) Sublessee or any other Person and shall insure the respective interests of Sublessor, Head Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease)Participant, as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (viv) shall be primary without any right of contribution from any other insurance which is carried by Sublessor, Head Lessor, the Owner Participant Indenture Trustee or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease)Owner Participant, (viivi) shall waive any right of subrogation of the insurers against Sublessor, Head Lessor, the Owner Participant Indenture Trustee and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease)Owner Participant, and (viiivii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Sublessor, Head Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) Sublessee to the extent of any moneys due to LessorSublessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor Sublessor or its designee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee Sublessee or any other third party that is entitled to receive such proceeds. As between Lessor Sublessor and LesseeSublessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I1) Except as ------------------------------------------------ provided in clause (II2) of this Section 11(b4.03(b), Lessee and subject to the provisions of Section 4.03(d) hereof permitting self-insurance, Owner shall maintain or cause to be maintained in effect, at its or any SublesseePermitted Lessee's expense, with insurers of recognized reputation and responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and fire and extended coverage and all-risk ground and flight coverage of aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, aircraft war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee Owner (or, if a Sublease is then in effect, by Sublesseeor any Permitted Lessee) with respect to other aircraft owned or leased, and operated by Lessee Owner (or such SublesseePermitted Lessee) on the same routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Agreement be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)4.03(d) hereof) not less than the Stipulated Loss Value Insured Amount for the Aircraft. Any policies carried in accordance ; and provided further, that subject to compliance with this paragraph Section 4.03(d) hereof, such all-risk property damage insurance covering Engines and Parts while temporarily removed from the Airframe or an airframe of (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to Parts) an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to need be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) obtained only to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participantavailable at reasonable cost (as reasonably determined by Owner). In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe in circumstances which do not constitute an Event of Loss with respect to the Airframe, Lessor the Indenture Trustee shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for the account of Lessee to Owner or any other third party that is entitled to receive such proceeds. All losses will be adjusted by Owner with the insurers; provided, however, that during a period when any Indenture Event of Default shall have occurred and be continuing, Owner shall not agree to any such adjustment without the consent of the Indenture Trustee. As between Lessor the Indenture Trustee and LesseeOwner, it is agreed that all proceeds of insurance payments maintained in compliance with the preceding paragraph and received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b4.01(e)(iv), Lessee and subject to the provisions of Section 4.01(e)(vi), Borrower shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized reputation and responsibility, all-risk ground ground, taxiing and flight aircraft hull insurance covering the Aircraft (including Engines and Parts temporarily removed from the Aircraft), and fire and explosion coverage, ingestion and lightning and electrical damage, and extended coverage and all-risk ground property damage insurance, including fire and flight coverage of transit, covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk or while removed from the Aircraft and governmental confiscation and expropriation (other than by the government of registry of not destined to be reattached to the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if insured on a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraftreplacement cost clause; provided that such insurance shall at all times while the Aircraft is subject to this Lease Mortgage be for an amount on an agreed value basis not less than 110% of the then outstanding principal amount of the Notes, together with accrued interest thereon (subject the “Insured Amount”). Further, Borrower shall at all times maintain or cause to selfbe maintained war risk (aircraft hulls) and governmental confiscation insurance (other than by the government of registry of the Aircraft) per the terms of AVN48B writeback except (b) or its equivalent providing insurance against the following risks: (1) strikes, riots, civil commotions or labor disturbances, (2) any malicious act or act of sabotage and (3) hi-jacking or any unlawful seizure or wrongful exercise of control of the aircraft or crew in flight (including any attempt at such seizure or control) made by any person or persons on board the aircraft acting without the consent of the insured. Such insurance to described in the extent permitted immediately preceding sentence shall be in an amount (taking into consideration any insurance or indemnification provided by the United States government or any agency or instrumentality thereof the obligations of which are supported by the full faith and credit of the United States government in accordance with Section 11(d)4.01(e)(viii) hereof) not less than the Stipulated Loss Value for the AircraftInsured Amount. Any policies carried All insurance described in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (iSection 4.01(e)(ii) shall name Lessor, be at least of a scope and coverage (except as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Subleaseto dollar requirements) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) is customarily carried by United States based regional air carriers engaged in the event of a loss involving proceeds in excess of $3,500,000 (orsame or similar business, if similarly situated with the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood Borrower and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, operating similar aircraft and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, providedengines; excluding, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect purposes of the respective interests of Lessorforegoing, the Indenture Trustee and the Owner Participant (andregional carriers owned by, if any Sublease shall be in effectcontrolled by, Lessee in its capacity as sublessor or otherwise covered under, a major carriers insurance policy unless Borrower also has insurance coverage under the Sublease) in such policies the a major carriers insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:policy.

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II2) of this Section 11(b2.03(b), Lessee the Grantor shall maintain or cause to be maintained in effect, at its or any SublesseePermitted Lessee's expense, with insurers of recognized reputation and responsibility, "all-risk ground and flight risk" aircraft hull insurance covering the Aircraft each Aircraft, Engine and Spare Engine and fire and extended coverage and "all-risk ground and flight coverage of risk" aircraft hull insurance covering Engines, Spare Engines and Parts while temporarily removed from the Aircraft an Airframe or airframe and not replaced by similar components (includingcomponents; provided, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft such Aircraft, Engine or Spare Engine is subject to this Lease Mortgage be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value Insured Amount for the such Aircraft. Any policies carried in accordance with this paragraph , Engine or Spare Engine; provided, further, that such "all-risk" property damage insurance covering Engines, Spare Engines and Parts while temporarily removed from an Airframe or an airframe or (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to Parts) an Engine installed on an airframe other than or Spare Engine need be obtained only to the Airframe, in which case Lessee extent commercially available at a reasonable cost (or any Sublesseeas reasonably determined by the Grantor) shall arrange for any payment of insurance proceeds in respect of such loss and then regularly obtained by major U.S. airlines. All losses will be adjusted by the Grantor (giving due regard to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess interests of the Stipulated Loss Value for Collateral Agent and the Aircraft shall be paid to Lessee or its order unless an Lenders) with the insurers; provided, however, that during a period when any Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessorcontinuing, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change Grantor shall not be effective as agree to Lessor, any such adjustment without the Indenture Trustee or consent of the Owner Participant Collateral Agent (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days other than in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss losses with respect to an engine (other than an EngineTranche A and B Priority Collateral prior to the indefeasible payment in full of the Tranche A and B Aircraft Mortgage, which shall be adjusted pursuant to Section 2.03(b) installed on of the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceedsTranche A and B Aircraft Mortgage). As between Lessor the Collateral Agent and Lesseethe Grantor, it is agreed that all proceeds of insurance payments maintained in compliance with the preceding paragraph and received as the result of the occurrence of an Event of Loss will be remitted to the Collateral Agent and applied as follows:in the manner described in Section 3.01 hereof.

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), The Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's own expense, with one or more insurers of recognized responsibilityreputation and responsibility reasonably satisfactory to the Lessor, all-risk aircraft ground and flight aircraft hull insurance covering the Aircraft each Aircraft, and all-risk ground and flight coverage of insurance with respect to any Engines and or Parts while temporarily removed from such Aircraft that (x) shall (consistent with the Aircraft other express requirements of this Section 11(b)) be of the type and not replaced in the form usually carried by the Lessee with respect to similar components aircraft and engines, and covering the risks normally insured against by the Lessee, and (includingy) shall be payable in Dollars in the United States, without limitation, (which may except as provided below exclude war risk and governmental confiscation and expropriation allied perils but shall include coverage against perils of strikes, riots, civil commotions, labor disturbances, any malicious act or act of sabotage or unlawful seizure, or wrongful exercise of control (other than by the government or any attempt at such seizure or exercise of registry of the Aircraftcontrol)) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublesseez) shall maintain war risk and governmental confiscation and expropriation (other than be in substantially the amount usually carried by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (orsimilarly situated airlines, if a Sublease is then in effectaccordance with prudent United States commercial airline industry practice; provided, by Sublessee) of the same type as the Aircraft; provided however, that such insurance shall at all times while the such Aircraft is subject to this Lease be for an amount (subject to self-insurance deductibles to the extent permitted by Section 11(d)) not less than 110% of the highest Stipulated Loss Value for of such Aircraft then or thereafter scheduled. Such insurance shall not provide the Aircraftinsurers with the right to replace any Airframe or any Engine with another airframe or engine. To the extent any Aircraft shall be used in an area in which major United States air carriers, in accordance with prudent industry practice, customarily carry or in which the Lessee (or, if a permitted foreign sublease shall then be in effect, such sublessee or other major international air carriers) customarily carries such coverage, the Lessee shall additionally maintain or cause to be maintained in effect, at its own expense, with insurers of recognized reputation and responsibility in the aviation industry, war risk insurance, including allied perils (including hijacking, terrorism and confiscation (other than by the Government of Registry)), that shall be in full force and effect throughout any geographical areas then traversed by such Aircraft in an amount not less than 110% of the highest Stipulated Loss Value of such Aircraft then or thereafter scheduled; provided that if such war risk and allied perils coverage is in effect, a “50-50 provisional claims settlement clause” shall be contained in such policy and in each all-risk hull policy. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall be amended to name Lessor, the Additional Insureds as owner trustee, the Indenture Trustee loss payees and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance shall be made payable to the extent permitted in Section 11(d), Finance Lessor as sole loss payee (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so all interests) as long as this Lease shall be subject to the Trust Indenture shall not have been dischargedLien of the Assignment Agreement and thereafter to the Lessor, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds event of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee $1,000,000 or its order unless an of any loss while a Specified Default or a Lease Event of Default shall have occurred and be continuing and (as notified to the insurers insurer by the Finance Lessor or, if the Finance Lessor shall have been notified thereof by Lessor or given notice to the Indenture Trusteeinsurer of release of this Lease from the Lien of the Assignment Agreement, the Lessor), (iviii) shall provide that that, if the insurers cancel such insurance shall be cancelled or materially altered in a manner adverse to the Additional Insureds for any reason whatever, the same shall be allowed to lapse for nonpayment of premium or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participantcoverage shall be reduced, such cancellation, alteration, lapse or change reduction shall not be effective as to Lessorany Additional Insured for 30 days, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) not less than 10 days (seven (7) days solely with respect to non-payment of premium in the case of hull all-risk property engine spare coverage, (and with respect to war risk and allied perils coverageinsurance, such shorter period as shall be customary for insurance policies of major United States air carriers) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, receipt by such Additional Insured of written notice by such insurers of such cancellation, cancellation or lapse or change, provided, however, that if of any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainablematerial change in policy terms and conditions, (viv) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) Additional Insured in such policies the insurance shall not be invalidated by any action or inaction of the Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person (other than the Additional Insured claiming coverage) and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease)Additional Insureds’ interests, as they appear, regardless of any breach or violation of any warrantywarranties, declaration declarations or condition conditions contained in such policies by the Lessee (or, if a Sublease is then in effect, or any Sublessee)such Person, (viv) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease provide that there shall be in effectno recourse against any Additional Insured for the payment of premiums, Lessee in its capacity as sublessor under the Sublease)commissions, (vii) shall waive any right of subrogation of the insurers against Lessorclub calls, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), assessments or advances and (viiivi) shall waive any right of the insurers to set-off or any setoff, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) Additional Insured to the extent of any moneys due such Person. The Lessee shall arrange for appropriate certification as to Lessor, each Aircraft as to the Indenture Trustee or satisfaction of the Owner Participantrequirements set forth above in this Section 11(b) to be made promptly (and in any case by the Delivery Date) to the Additional Insureds by each insurer with respect thereto. In the case of a loss lease or contract with the United States of America (but not any agency or instrumentality thereof, unless its obligations carry the full faith and credit of the United States of America) in respect of any Aircraft, a valid agreement (which shall be in form and substance satisfactory to the Additional Insureds) by the United States of America (but not any agency or instrumentality thereof, unless its obligations carry the full faith and credit of the United States of America) to indemnify the Lessee and the Additional Insureds against the same risks that the Lessee is required hereunder to insure against, on similar terms and conditions as provided herein, in an amount at least equal at any time during the term of such lease or contract to the Stipulated Loss Value that would be payable if an Event of Loss with respect to an engine (other than an Enginesuch Aircraft occurred at such time, shall be considered adequate insurance with respect to such Aircraft under this Section 11(b) installed on to the Airframe, Lessor shall hold any payment to it extent of the risks and in the amounts that are the subject of any insurance proceeds such agreement to indemnify. Each policy required under this Section 11(b) shall satisfy the requirements set forth in respect clauses (1), (3) and (4) of such loss for the account penultimate sentence of Lessee or any other third party that is entitled to receive such proceedsSection 11(a). As between the Lessor and the Lessee, it is agreed that all insurance payments received under policies that the Lessee is required to maintain hereunder as the result of the occurrence of an Event of Loss will with respect to any Airframe or any Engine shall be paid to, or retained by, the Finance Lessor or, if the Aircraft shall no loner be subject to the Lien of the Finance Lease, the Lessor, as security for the Lessee’s obligations hereunder and shall be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b7.04(b), Lessee the Owner shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) with respect to other aircraft owned or operated by Lessee the Owner (or such SublesseeLessee) on the same routes, except that Lessee the Owner (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee the Owner (or, if a Sublease Lease is then in effect, by SublesseeLessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Trust Indenture be for an amount (subject to self-insurance to the extent permitted by Section 11(d7.04(d)) not less than the Stipulated 105% of the then aggregate unpaid Principal Amount of the Secured Certificates (the "Loan Loss Value for the AircraftValue"). Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) as an additional insuredsinsured, as their respective interests its interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d7.04(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of [$3,500,000 5,000,000 for A319's and 757's] [$7,000,000 for A330's] (or, if the Aircraft is then under a SubleaseLease, in excess of [$2,000,0003,000,000 for A319's and 757's] [$4,000,000 for A330's]), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for aggregate unpaid Principal Amount of the Aircraft Secured Certificates plus all accrued and unpaid interest thereon (the "Balance Due") shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee the Owner (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Trustee whether such payment is made to Lessee the Owner (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Trustee otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Trustee shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Owner or its order, and (B) the entire amount of any loss involving proceeds of [$3,500,000 5,000,000 for A319's and 757's] [$7,000,000 for A330's] (or, if the Aircraft is then under a SubleaseLease, of [$2,000,0003,000,000 for A319's and 757's] [$4,000,000 for A330's]) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Owner or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantTrustee, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Owner (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Owner in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Trustee or the Owner Participant or Lessee (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantTrustee. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor the Indenture Trustee shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor the Indenture Trustee and Lesseethe Owner, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I1) Except as ------------------------------------------------ provided in clause (II2) of this Section 11(b4.03(b), Lessee and subject to the provisions of Section 4.03(d) hereof permitting self-insurance, Owner shall maintain or cause to be maintained in effect, at its or any SublesseePermitted Lessee's expense, with insurers of recognized reputation and responsibility, all-risk ground [Trust Indenture and flight aircraft hull Mortgage (2001-1 000-0)] xxxxxxxx xxxx insurance covering the Aircraft and fire and extended coverage and all-risk ground and flight coverage of aircraft hull insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, aircraft war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee Owner (or, if a Sublease is then in effect, by Sublesseeor any Permitted Lessee) with respect to other aircraft owned or leased, and operated by Lessee Owner (or such SublesseePermitted Lessee) on the same routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease Agreement be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)4.03(d) hereof) not less than the Stipulated Loss Value Insured Amount for the Aircraft. Any policies carried in accordance ; and provided further, that subject to compliance with this paragraph Section 4.03(d) hereof, such all-risk property damage insurance covering Engines and Parts while temporarily removed from the Airframe or an airframe of (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to Parts) an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to need be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) obtained only to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participantavailable at reasonable cost (as reasonably determined by Owner). In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe in circumstances which do not constitute an Event of Loss with respect to the Airframe, Lessor the Indenture Trustee shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for the account of Lessee to Owner or any other third party that is entitled to receive such proceeds. All losses will be adjusted by Owner with the insurers; provided, however, that during a period when any Indenture Event of Default shall have occurred and be continuing, Owner shall not agree to any such adjustment without the consent of the Indenture Trustee. As between Lessor the Indenture Trustee and LesseeOwner, it is agreed that all proceeds of insurance payments maintained in compliance with the preceding paragraph and received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (Ii) Except as -------------------------------------------------- provided in clause (IIii) of this Section 11(b), and subject to the provisions of Section 11(d) hereof permitting self-insurance, Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized reputation and responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and fire and extended coverage and all-risk ground and flight coverage of property damage insurance covering Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained either by Lessee (or, if a Sublease is then in effect, by Sublessee) or any Sublessee with respect to other aircraft owned owned, leased or operated by either the Lessee (or such Sublessee) Sublessee on the same routes); provided, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times -------- while the Aircraft is subject to this Lease be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d)) hereof) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for the account of to Lessee or any other third party that is entitled to receive such proceeds. Except during a period when a Default or Lease Event of Default has occurred and is continuing, all losses will be adjusted by Lessee with the insurers. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b3.6(b), Lessee the Company shall maintain or cause to be maintained in effect, at its or any SublesseeLessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the relevant Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee the Company (or, if a Sublease Lease is then in effect, by Sublesseeany Lessee) with respect to other of the same type aircraft owned or operated by Lessee the Company (or such SublesseeLessee) on the same routes, except that Lessee the Company (or such SublesseeLessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the relevant Aircraft) and hijacking insurance if the Aircraft is are operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) the Company of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is are subject to this Lease Mortgage be for an amount (subject to self-insurance to the extent permitted by Section 11(d3.6(d)) not less than the Stipulated Loss Value for amount of insurance of the same type maintained by the Company on the Effective Date with respect to the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall be amended to name Lessorthe Collateral Agent as a loss payee, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests interest may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d3.6(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if an amount equal to 13.5% of the Appraised Value of the Aircraft is then under a Sublease, in excess subject to such event of $2,000,000)loss, the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for amount of the Aircraft reduction in the Total Revolving Commitments as required by Section 7.5(a)(iii) of the Credit Agreement with respect to such loss (the "Balance Due"), shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent (except in the case of a loss with respect to an Engine installed on an airframe other than the an Airframe, in which case Lessee the Company (or any SublesseeLessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) Collateral Agent whether such payment is made to Lessee the Company (or any SublesseeLessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) Collateral Agent otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) Collateral Agent shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee the Company or its order, and (B) the entire amount of any loss involving total proceeds of $3,500,000 equal to the amount set forth in clause (or, if the Aircraft is then under a Sublease, of $2,000,000A) above or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft Balance Due shall be paid to Lessee the Company or its order unless an Event of Default shall have occurred and be continuing and the insurers shall have been notified thereof by Lessor or the Indenture TrusteeCollateral Agent, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner ParticipantCollateral Agent, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant Collateral Agent (or, if any Sublease shall be Lease is in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), respectively, Lease) of written notice by such insurers of such cancellation, lapse or change, ; provided, however, that if any notice period specified above is not reasonably generally obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably generally obtainable, (v) shall 18 provide that in respect of the respective interests interest of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant Collateral Agent (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the Sublease), as they appear, Lease) regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee the Company (or, if a Sublease Lease is then in effect, any SublesseeLessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee Secured Creditors (or, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant Secured Creditors (and the Indenture Trustee (and, if any Sublease Lease shall be in effect, Lessee the Company in its capacity as sublessor lessor under the SubleaseLease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, Secured Creditors or the Owner Participant or Lessee Company (or any SublesseeLessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner ParticipantCollateral Agent. In the case of a loss with respect to an engine (other than an Engine) installed on the an Airframe, Lessor the Collateral Agent shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee the Company or any other third party that is entitled to receive such proceeds. As between Lessor the Collateral Agent and Lesseethe Company, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I1) Except as provided in clause (II2) of this Section 11(b10(b), Lessee and subject to the provisions of Section 10(d) permitting self-insurance, Sublessee shall maintain or cause to be maintained in effect, at its or any Permitted Sublessee's ’s expense, with insurers of nationally or internationally recognized reputation and responsibility, all-risk ground and flight aircraft hull insurance (including aircraft hull war risk, hijacking and related perils) covering the each Aircraft and all-all risk ground and flight coverage of spares/property damage insurance covering Engines, Propellers, Spare Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the an Aircraft; provided that such insurance shall at all times while the Aircraft an Item of Equipment is subject to this Lease Sublease be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d10(d)) not less than the Stipulated Loss Agreed Value for the Aircraft. Any policies carried in accordance such Item of Equipment; provided further, that, subject to compliance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insuranceSection 10(d), such all-risk spares/property damage insurance covering Engines, Propellers, Spare Engines and Parts removed from an Airframe or an airframe or (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to Parts) an Engine, Propeller or Spare Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to replaced by similar Parts need be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) obtained only to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participantavailable at reasonable cost (as reasonably determined by Sublessee). In the case of a loss with respect to an engine (other than an Engine or Spare Engine) or propeller (other than a Propeller) installed on the an Airframe in circumstances which do not constitute an Event of Loss with respect to such Airframe, Lessor Sublessor shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for to Sublessee; provided that no Event of Default of the account of Lessee type described in Section 13(a), (b), (m) or (n) hereof has occurred and is continuing, or any other third party that is entitled to receive such proceeds. All insured losses will be adjusted by Sublessee with the insurers; provided, however, that in the event an Event of Default under the Sublease has occurred and is continuing, all losses will continue to be adjusted by the Named Insured(s) with the insurers but no loss settlement/finalization of insurance proceeds will be concluded without the prior written consent of Sublessor. As between Lessor Sublessor and LesseeSublessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:: (x) if such payments are received with respect to an Airframe (or an Airframe and the Engines and Propellers installed thereon) or a Spare Engine (where Sublessee has elected not to replace such Spare Engine with an Acceptable Alternate Engine pursuant to Section 9(b)), so much of such payments remaining, after reimbursement of Sublessor, Head Lessor, the Trustee and the Owner Participant for reasonable costs and expenses, as shall not exceed the Agreed Value for such Aircraft or Spare Engine, as the case may be, and the Exhibit C-1 other amounts payable pursuant to Section 9(a) or 9(b), as the case may be, shall be applied in reduction of Sublessee’s obligation to pay such Agreed Value for such Aircraft or Spare Engine and other amounts payable pursuant to Section 9(a) or 9(b), if not already paid by Sublessee, or, if already paid by Sublessee, shall be applied to reimburse Sublessee for its payment of such Agreed Value and such other amounts payable, and the balance, if any, of such payments remaining thereafter will be paid over to, or retained by, Sublessee (or if directed by Sublessee, any Permitted Sublessee); and (y) if such payments are received with respect to an Engine, Spare Engine (where Sublessee has elected to replace such Spare Engine with an Acceptable Alternate Engine pursuant to Section 9(b)) or a Propeller under the circumstances contemplated by Section 9(b), so much of such payments remaining after reimbursement of Sublessor Head Lessor, the Trustee and the Owner Participant for reasonable costs and expenses, shall be paid over to, or retained by, Sublessee (or if directed by Sublessee, any Permitted Sublessee); provided that Sublessee shall have fully performed or concurrently therewith will fully perform the terms of Section 9(b) hereof with respect to the Event of Loss for which such payments are made and no Event of Default of the type described in Section 13(a), (b), (m), (n) or (o) shall have occurred and be continuing. As between Sublessor and Sublessee, the insurance payments for any property damage loss to an Item of Equipment not constituting an Event of Loss with respect thereto will be applied in payment for repairs or for replacement property in accordance with the terms of Sections 7 and 8, if not already paid for by Sublessee (or any Permitted Sublessee), and any balance (or if already paid for by Sublessee (or any Permitted Sublessee), all such insurance proceeds) remaining after compliance with such Sections with respect to such loss shall be paid to Sublessee (or any Permitted Sublessee if directed by Sublessee). (2) During any period that an Item of Equipment is on the ground and not in operation, Sublessee may carry or cause to be carried, in lieu of the insurance required by clause (1) above, and subject to self-insurance to the extent permitted by Section 10(d), insurance otherwise conforming with the provisions of said clause (1) except that the scope of the risks and the type of insurance shall be the same as from time to time applicable to aircraft and engines owned or Subleased by Sublessee (or, if a Permitted Sublease is then in effect, by Permitted Sublessee) of the same type as such Item of Equipment similarly on the ground and not in operation; provided that, subject to self-insurance to the extent permitted by Section 10(d), Sublessee shall maintain insurance against risk of loss or damage to each Item of Equipment in an amount at least equal to the Agreed Value for such Item of Equipment during such period that such Item of Equipment is on the ground and not in operation. (c) Reports, etc. Sublessee will furnish, or cause to be furnished, to Sublessor, Head Lessor, and the Owner Participant, on or before the Delivery Date for an Item of Equipment and on each annual anniversary date of Sublessee’s applicable insurance, an undertaking, signed by Sublessee’s regular insurance broker or any other independent firm of insurance brokers reasonably acceptable to Sublessor which brokers may be in the regular employ of Sublessee (the “Insurance Brokers”), describing in reasonable detail the hull and liability insurance (and property insurance Exhibit C-2 for detached Engines, Propellers, Spare Engines and Parts) then carried and maintained with respect to such Item of Equipment and stating the opinion of such firm that the insurance complies with the terms of this Sublease; provided, that all information contained in the foregoing undertaking shall be subject to the terms and conditions of Section 12(i) of the Additional Agreement. Sublessee will cause such Insurance Broker to agree to advise Sublessor, Head Lessor, the Trustee and the Owner Participant in writing at least thirty (30) days (seven (7) days in the case of war-risk and allied perils coverage), prior to the cancellation or material adverse change of any insurance maintained pursuant to this Section 10; provided that if the notice period specified above is not reasonably obtainable, the Insurance Broker shall provide for as long a period of prior notice as shall then be reasonably obtainable. In addition, Sublessee will also cause such Insurance Broker to deliver to Head Lessor, Sublessor, the Trustee and the Owner Participant on or prior to the date of expiration of any insurance policy referenced in a previously delivered certificate of insurance, a new certificate of insurance, substantially in the same form as delivered by Sublessee to such parties on the relevant Delivery Date except for such changes in the report or the coverage consistent with the terms hereof. In the event that Sublessee or any Permitted Sublessee shall fail to maintain or cause to be maintained insurance as herein provided, Sublessor may at its sole option, but shall be under no duty to, provide such insurance and, in such event, Sublessee shall, upon demand, reimburse Sublessor as Supplemental Rent, for the cost thereof to Sublessor; provided, however, that no exercise by Sublessor of said option shall affect the provisions of this Sublease, including the provisions of Section 13(g). (d) Self-Insurance. Sublessee may self-insure by way of deductible, premium adjustment or franchise provisions or otherwise (including, with respect to insurance maintained pursuant to Section 10(b), insuring for an amount that is less than the Agreed Value of the relevant Item of Equipment) the risks required to be insured against pursuant to this Section 10 under a program applicable to all aircraft (whether owned or Subleased) in Sublessee’s fleet, but in no case shall the amount of self-insurance in regard to Section 10 exceed for any occurrence [*] per Aircraft and [*] per Spare Engine or [*] in the case of off-wing engine test runs (the “Maximum Deductible Amount”). (e)

Insurance Against Loss or Damage to the Aircraft. (I1) Except as provided in clause (II2) of this Section 11(b10(b), Lessee and subject to the provisions of Section 10(d) permitting self-insurance, Sublessee shall maintain or cause to be maintained in effect, at its or any Permitted Sublessee's ’s expense, with insurers of nationally or internationally recognized reputation and responsibility, all-risk ground and flight aircraft hull insurance (including aircraft hull war risk, hijacking and related perils) covering the each Aircraft and all-all risk ground and flight coverage of spares/property damage insurance covering Engines, Propellers, Spare Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the an Aircraft; provided that such insurance shall at all times while the Aircraft an Item of Equipment is subject to this Lease Sublease be for an amount (subject to taking into account self-insurance to the extent permitted by Section 11(d10(d)) not less than the Stipulated Loss Agreed Value for the Aircraft. Any policies carried in accordance such Item of Equipment; provided further, that, subject to compliance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insuranceSection 10(d), such all-risk spares/property damage insurance covering Engines, Propellers, Spare Engines and Parts removed from an Airframe or an airframe or (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to Parts) an Engine, Propeller or Spare Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to replaced by similar Parts need be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) obtained only to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participantavailable at reasonable cost (as reasonably determined by Sublessee). In the case of a loss with respect to an engine (other than an Engine or Spare Engine) or propeller (other than a Propeller) installed on the an Airframe in circumstances which do not constitute an Event of Loss with respect to such Airframe, Lessor Sublessor shall hold promptly remit any payment made to it of any insurance proceeds in respect of such loss for to Sublessee; provided that no Event of Default of the account of Lessee type described in Section 13(a), (b), (m) or (n) hereof has occurred and is continuing, or any other third party that is entitled to receive such proceeds. All insured losses will be adjusted by Sublessee with the insurers; provided, however, that in the event an Event of Default under the Sublease has occurred and is continuing, all losses will continue to be adjusted by the Named Insured(s) with the insurers but no loss settlement/finalization of insurance proceeds will be concluded without the prior written consent of Sublessor. As between Lessor Sublessor and LesseeSublessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:

Insurance Against Loss or Damage to the Aircraft. (I) Except as provided in clause (II) of this Section 11(b), Lessee shall maintain or cause to be maintained in effect, at its or any Sublessee's expense, with insurers of recognized responsibility, all-risk ground and flight aircraft hull insurance covering the Aircraft and all-risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components (including, without limitation, war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance, if and to the extent the same is maintained by Lessee (or, if a Sublease is then in effect, by Sublessee) with respect to other aircraft owned or operated by Lessee (or such Sublessee) on the same routes, except that Lessee (or such Sublessee) shall maintain war risk and governmental confiscation and expropriation (other than by the government of registry of the Aircraft) and hijacking insurance if the Aircraft is operated on routes where the custom is for major international air carriers flying comparable routes to carry such insurance) which is of the type as from time to time applicable to aircraft owned or operated by Lessee (or, if a Sublease is then in effect, by Sublessee) of the same type as the Aircraft; provided that such insurance shall at all times while the Aircraft is subject to this Lease be for an amount (subject to self-insurance to the extent permitted by Section 11(d)) not less than the Stipulated Loss Value for the Aircraft. Any policies carried in accordance with this paragraph (b) covering the Aircraft and any policies taken out in substitution or replacement for any such policies (i) shall name Lessor, as owner trustee, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) as additional insureds, as their respective interests may appear (but without imposing on any such party liability to pay premiums with respect to such insurance), (ii) may provide for self-insurance to the extent permitted in Section 11(d), (iii) shall provide that (A) in the event of a loss involving proceeds in excess of $3,500,000 (or, if the Aircraft is then under a Sublease, in excess of $2,000,000), the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) (except in the case of a loss with respect to an Engine installed on an airframe other than the Airframe, in which case Lessee (or any Sublessee) shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Lessor (or, so long as the Trust Indenture shall not have been discharged, the Indenture Trustee) whether such payment is made to Lessee (or any Sublessee) or any third party), it being understood and agreed that in the case of any payment to Lessor (or the Indenture Trustee) otherwise than in respect of an Event of Loss, Lessor (or the Indenture Trustee) shall, upon receipt of evidence satisfactory to it that the damage giving rise to such payment shall have been repaired or that such payment shall then be required to pay for repairs then being made, pay the amount of such payment to Lessee or its order, and (B) the entire amount of any loss involving proceeds of $3,500,000 (or, if the Aircraft is then under a Sublease, of $2,000,000) or less or the amount of any proceeds of any loss in excess of the Stipulated Loss Value for the Aircraft shall be paid to Lessee or its order unless an Event of Default shall have occurred and be continuing and the insurers have been notified thereof by Lessor or the Indenture Trustee, (iv) shall provide that if the insurers cancel such insurance for any reason whatever, or such insurance lapses for non-payment of premium or if any material change is made in the insurance which adversely affects the interest of Lessor, the Indenture Trustee or the Owner Participant, such cancellation, lapse or change shall not be effective as to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Lessor, the Indenture Trustee or the Owner Participant (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), respectively, of written notice by such insurers of such cancellation, lapse or change, provided, however, that if any notice period specified above is not reasonably obtainable, such policies shall provide for as long a period of prior notice as shall then be reasonably obtainable, (v) shall provide that in respect of the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease) in such policies the insurance shall not be invalidated by any action or inaction of Lessee (or, if a Sublease is then in effect, any Sublessee) or any other Person and shall insure the respective interests of Lessor, the Indenture Trustee and the Owner Participant (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee (or, if a Sublease is then in effect, any Sublessee), (vi) shall be primary without any right of contribution from any other insurance which is carried by Lessor, the Owner Participant or the Indenture Trustee (or, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), (vii) shall waive any right of subrogation of the insurers against Lessor, the Owner Participant and the Indenture Trustee (and, if any Sublease shall be in effect, Lessee in its capacity as sublessor under the Sublease), and (viii) shall waive any right of the insurers to set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Lessor, the Indenture Trustee, the Owner Participant or Lessee (or any Sublessee) to the extent of any moneys due to Lessor, the Indenture Trustee or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, Lessor shall hold any payment to it of any insurance proceeds in respect of such loss for the account of Lessee or any other third party that is entitled to receive such proceeds. As between Lessor and Lessee, it is agreed that all insurance payments received as the result of the occurrence of an Event of Loss will be applied as follows:: (x) if such payments are received with respect to the Airframe (or the Airframe and the Engines installed thereon), (i) unless such property is replaced pursuant to the last paragraph of Section 10(a), so much of such payments remaining, after reimbursement of Lessor (as provided in Section 7.01 of the Trust Agreement) for reasonable costs and expenses, as shall not exceed the Stipulated Loss Value required to be paid by Lessee pursuant to Section 10(a) hereof shall be applied in reduction of Lessee's obligation to pay such Stipulated Loss Value, if not already paid by Lessee, or, if already paid by Lessee, shall be applied to reimburse Lessee for its payment of such Stipulated Loss Value, and the balance, if any, of such payments remaining thereafter will be paid over to, or retained by, Lessee (or if directed by Lessee, any Sublessee); or (ii) if such property is replaced pursuant to the last paragraph of Section 10(a), such payments shall be paid over to, or retained by, Lessee (or if directed by Lessee, any Sublessee), provided that Lessee shall have fully performed, or concurrently therewith will fully perform, the terms of the last paragraph of Section 10(a) with respect to the Event of Loss for which such payments are made; and