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

Insurance Against Loss or Damage to the Aircraft. (a) the Borrower shall at all times maintain or cause to be maintained in effect, at its expense, with insurers of recognized responsibility, "all-risk" aircraft hull insurance covering the Aircraft and "all-risk" 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 and hijacking insurance, (if and to the extent that the Aircraft is operated outside the United States or Canada in an area where war risk insurance is customarily maintained by commercial operators), and fire, transit and extended coverage with respect to any Engines or Parts while removed from the Aircraft; provided, that such insurance shall at all times be for an amount not less than $9,000,000. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, the Lender shall hold any payment received by it of any insurance proceeds in respect of such loss for the account of the Borrower or any other third party that is entitled to receive such proceeds. Except during a period a Default or an Event of Default has occurred and is continuing, all losses will be adjusted with the insurers by the Borrower (giving due regard to the interests of the Lender). As between the Borrower and the Lender, it is agreed that all insurance payments received as a result of the occurrence of an Event of Loss will be applied as follows: (1) if such payments are received with respect to the Airframe (or the Airframe and the Engines installed thereon), payments as shall not exceed the aggregate amount required to be paid by the Borrower pursuant to Section 5.01 shall be applied in reduction of the Borrower's obligation to pay such amount, if not already paid by the Borrower, or, if already paid by the Borrower, shall be applied to reimburse the Borrower for its payment of such amount, and the balance, if any, of such payments remaining thereafter will be paid over to the Borrower; and (2) if such payments are received with respect to an Engine under the circumstances contemplated by Section 5.02, such payments shall be paid over to the Borrower, provided that the Borrower shall have fully performed or, concurrently therewith, will fully perform the terms of Section 5.02 with respect to the Event of Loss for which such payments are made. As between the Borrower and the Lender, the insurance payments for any property damage loss to any Airframe or any Engine not constituting an Event of Loss with respect thereto or with respect to an Event of Loss of an Engine shall be paid as follows: in the event that insurance proceeds received with respect to an event not constituting an Event of Loss do not exceed $250,000, the full amount thereof shall be paid to the Borrower, and if such insurance proceeds exceed $250,000, the full amount shall be paid to the Lender, to be held in trust for the account of the Borrower subject to the Lien of the Security Agreement covering the Aircraft of which such Airframe or Engine is a part, to reimburse the Borrower for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacements.

Appears in 1 contract

Samples: Loan Agreement (Airways Corp)

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Insurance Against Loss or Damage to the Aircraft. (a) the Borrower Sublessee shall at all times maintain or cause to be maintained in effect, effect at its expense, with insurers of recognized responsibility, "all-risk" risk ground and flight aircraft hull insurance covering the Aircraft and "all-risk" risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components, 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 that the Aircraft is operated outside the United States or Canada in an area where war risk insurance is customarily maintained unless otherwise agreed by commercial operatorsSublessor), and fire, transit and extended coverage with respect to any Engines or Parts while removed from the Aircraft; provided, provided that such insurance shall at all times while the Aircraft is subject to this Sublease be for an amount 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 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) shall provide that (A) in the event of a loss involving proceeds in excess of $9,000,000250,000, the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to or at the direction of Sublessor (including, 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 Sublessee shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Sublessor (or, so long as the Trust Indenture shall not have been discharged, to the Indenture Trustee) whether such payment is made to Sublessee or any third party), it being understood and agreed that in the case of any payment to Sublessor or its designee (including the Indenture Trustee) otherwise than in respect of an Event of Loss, 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, or exercise such rights as it may have to cause to be paid, the amount of such payment to Sublessee or its order and (B) the entire amount of any loss involving proceeds of $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 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, (iii) 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 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 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, 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, (iv) shall provide that in respect of the respective interests of Sublessor, Head Lessor, the Indenture Trustee and the Owner Participant in such policies the insurance shall not be invalidated by any action or inaction of Sublessee or any other Person and shall insure the respective interests of Sublessor, Head Lessor, the Indenture Trustee and the Owner Participant, as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Sublessee, (v) shall be primary without any right of contribution from any other insurance which is carried by Sublessor, Head Lessor, the Indenture Trustee or the Owner Participant, (vi) shall waive any right of subrogation of the insurers against Sublessor, Head Lessor, the Indenture Trustee and the Owner Participant, and (vii) 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 Sublessee to the extent of any moneys due to Sublessor, 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, the Lender Sublessor or its designee shall hold any payment received by to it of any insurance proceeds in respect of such loss for the account of the Borrower Sublessee or any other third party that is entitled to receive such proceeds. Except during a period a Default or an Event of Default has occurred and is continuing, all losses will be adjusted with the insurers by the Borrower (giving due regard to the interests of the Lender). As between the Borrower Sublessor and the LenderSublessee, it is agreed that all insurance payments received as a the result of the occurrence of an Event of Loss will be applied as follows: (1) if such payments are received with respect to the Airframe (or the Airframe and the Engines installed thereon), payments as shall not exceed the aggregate amount required to be paid by the Borrower pursuant to Section 5.01 shall be applied in reduction of the Borrower's obligation to pay such amount, if not already paid by the Borrower, or, if already paid by the Borrower, shall be applied to reimburse the Borrower for its payment of such amount, and the balance, if any, of such payments remaining thereafter will be paid over to the Borrower; and (2) if such payments are received with respect to an Engine under the circumstances contemplated by Section 5.02, such payments shall be paid over to the Borrower, provided that the Borrower shall have fully performed or, concurrently therewith, will fully perform the terms of Section 5.02 with respect to the Event of Loss for which such payments are made. As between the Borrower and the Lender, the insurance payments for any property damage loss to any Airframe or any Engine not constituting an Event of Loss with respect thereto or with respect to an Event of Loss of an Engine shall be paid as follows: in the event that insurance proceeds received with respect to an event not constituting an Event of Loss do not exceed $250,000, the full amount thereof shall be paid to the Borrower, and if such insurance proceeds exceed $250,000, the full amount shall be paid to the Lender, to be held in trust for the account of the Borrower subject to the Lien of the Security Agreement covering the Aircraft of which such Airframe or Engine is a part, to reimburse the Borrower for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacements.

Appears in 1 contract

Samples: Lease Agreement (Pinnacle Airlines Corp)

Insurance Against Loss or Damage to the Aircraft. (a) the Borrower N2T, at its own expense, shall at all times maintain or cause to be maintained in effect with insurers and/or reinsurers of recognized reputation and responsibility all risk ground and flight aircraft hull insurance with respect to the Aircraft against any loss, theft or damage to the Aircraft, including, without limitation F.O.D. (foreign object damage), fire and explosion coverage, and lightning and electrical damage (including any engines or parts while removed from the Aircraft), for an amount not less than Forty Five Million Dollars ($45,000,000.00). N2T shall additionally maintain in effect, at its own expense, with insurers of recognized responsibility, "all-war risk" aircraft hull insurance covering the Aircraft and "all-risk" coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components, includinghijacking (air piracy), without limitation, war risk and governmental confiscation and expropriation and hijacking insurance, (if and to the extent that the Aircraft is operated outside the United States or Canada in an area where war risk insurance is customarily maintained by commercial operators), and fire, transit and extended coverage with respect to any Engines or Parts while removed from the Aircraft; provided, that such insurance shall at all times be for an amount not less than $9,000,000. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, the Lender shall hold any payment received by it of any insurance proceeds in respect of such loss for the account of the Borrower or any other third party that is entitled to receive such proceeds. Except during a period a Default or an Event of Default has occurred and is continuing, all losses will be adjusted with the insurers by the Borrower (giving due regard to the interests of the Lender). As between the Borrower and the Lender, it is agreed that all insurance payments received as a result of the occurrence of an Event of Loss will be applied as follows: (1) if such payments are received with respect to the Airframe (or the Airframe Aircraft. All such insurance shall be in full force and the Engines installed thereon), payments as shall not exceed the aggregate amount required to be paid effect throughout any geographical areas at any time traversed by the Borrower pursuant to Section 5.01 Aircraft and shall be applied payable in reduction of Dollars in the Borrower's obligation to pay such amount, if not already paid by United States. Any policies carried in accordance with this Section 8.2: (1) name N2T as the Borrower, or, if already paid by the Borrower, shall be applied to reimburse the Borrower for its payment of such amount, and the balance, if any, of such payments remaining thereafter will be paid over to the Borrowerloss payee; and (2) be with insurance companies with an A.M. Best rating of at least A- and a financial size classification of VII or otherwise as mutually approved by N2T and Oakley; (3) provide for not less than thirty (30) days prior written notice to be received by the certificate holders and Oakley before any lapse, material alteration, termination or cancellation of such insurance policy; (4) provide that in respect of the interests of Oakley such policies of insurance shall insure Oakley regardless of any breach or violation of any warranty, declarations or conditions contained in such policies by N2T or any other person; (5) shall waive any rights of set off, counterclaim or deduction, whether by attachment or otherwise, and all rights of subrogation against Oakley, and Oakley’s officers, employees and servants; and (6) provide that, if the insurers cancel such payments are received with respect insurance for any reason whatever, or the same is allowed to an Engine under the circumstances contemplated by Section 5.02lapse for non-payment of premium, or if there is any material change in policy terms and conditions, such payments cancellation, lapse or change shall not be paid over to effective until thirty (30) calendar days after receipt by Oakley of written notice from such insurers of such cancellation, lapse or change. Each property insurance policy shall (i) be primary without right of contribution from any other insurance which is carried by Oakley; and (ii) expressly provide that all of the Borrowerprovisions thereof, provided that except the Borrower limits of liability, shall have fully performed or, concurrently therewith, will fully perform the terms of Section 5.02 with respect to the Event of Loss for which such payments are made. As between the Borrower and the Lender, the insurance payments for any property damage loss to any Airframe or any Engine not constituting an Event of Loss with respect thereto or with respect to an Event of Loss of an Engine shall be paid as follows: operate in the event that insurance proceeds received with respect to an event not constituting an Event of Loss do not exceed $250,000, the full amount thereof shall be paid to the Borrower, and same manner as if such insurance proceeds exceed $250,000, the full amount shall be paid to the Lender, to be held in trust for the account of the Borrower subject to the Lien of the Security Agreement there were a separate policy covering the Aircraft of which such Airframe or Engine is a part, to reimburse the Borrower for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacementseach insured.

Appears in 1 contract

Samples: Lease Agreement (Oakley Inc)

Insurance Against Loss or Damage to the Aircraft. (a) the Borrower Lessee shall at all times maintain or cause to be maintained in effect, at its Lessee's sole expense, with insurers of recognized responsibility, "all-risk" aircraft hull and war risk insurance covering the Aircraft and "all-risk" coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components, including, without limitation, war risk and risk, governmental confiscation and expropriation and hijacking insurance, (if and to the extent that the Aircraft is operated outside the United States or Canada in an area where war risk insurance is customarily maintained by commercial operators), and fire, transit and extended coverage with respect to any Engines or Parts while removed from the Aircraft; provided, that such insurance shall at all times be for an amount not less than $9,000,000the Stipulated Loss Value. In the case of a loss with With respect to an engine (other than an Engine) installed on the Airframe, the Lender shall hold any payment received by it of any insurance proceeds in respect of such loss for under the account of the Borrower or any other third party that is entitled to receive such proceeds. Except during a period a Default or an Event of Default has occurred and is continuingforegoing policies, all losses will be adjusted with the insurers by the Borrower (giving due regard to the interests of the Lender). As between the Borrower and the Lender, it is agreed that all insurance payments received as a result of the occurrence of an Event of Loss will be applied as follows: (1a) if such payments are received with respect to the Airframe (or the Airframe and the Engines installed thereon), payments as shall not exceed the aggregate amount Stipulated Loss Value required to be paid by the Borrower pursuant to Section 5.01 Lessee shall be applied in reduction of the BorrowerLessee's obligation to pay such amount, if not already paid by the BorrowerLessee, or, if already paid by the BorrowerLessee, shall be applied to reimburse the Borrower Lessee for its payment of such amount, and the balance, if any, of such payments remaining thereafter will shall be paid over to the BorrowerLessee; and , (2b) if such payments are received with respect to an Event of Loss with respect to an Engine under the circumstances contemplated by Section 5.02, such payments shall be paid over to the BorrowerLessee, provided that the Borrower Lessee shall have fully performed or, concurrently therewith, will fully perform the terms of Section 5.02 11.2 with respect to the Event of Loss for which such payments are made. As between . (a) to Lessee if the Borrower amount of insurance payment(s) is less than US$25,000, to be applied by Lessee for accomplishing repairs and/or replacements as required; and (b) solely to Lessor if the Lender, the amount of insurance payments for any property damage loss to any Airframe or any Engine not constituting an Event of Loss with respect thereto or with respect to an Event of Loss of an Engine shall be paid as follows: in the event that insurance proceeds received with respect to an event not constituting an Event of Loss do not exceed $250,000, the full amount thereof shall be paid to the Borrower, and if such insurance proceeds exceed $250,000, the full amount shall be paid to the Lenderpayment(s) is greater than US$25,000, to be held in trust for the account of the Borrower subject and reimbursed to the Lien of the Security Agreement covering the Aircraft of which such Airframe or Engine is a part, to reimburse the Borrower Lessee for accomplishing repairs and/or replacements as required, or for Lessor to pay suppliers directly for such repairs and/or replacements.

Appears in 1 contract

Samples: Aircraft Lease Agreement (MGC Communications Inc)

Insurance Against Loss or Damage to the Aircraft. (a1) Except as provided in clause (2) of this subsection (b), and subject to the Borrower provisions of subsection (d) of this Exhibit B permitting the self-insurance, Owner shall at all times maintain or cause to be maintained in effect, at its or any Lessee's expense, with insurers of nationally or internationally recognized responsibility, "all-risk" risk aircraft hull insurance covering the Aircraft and "fire and extended coverage and all-risk" coverage of risk 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 and hijacking insurance, (if and to the extent that the Aircraft is operated outside the United States or Canada in an area where war risk insurance is customarily maintained by commercial operators), and fire, transit and extended coverage with respect to any Engines or Parts while removed from the Aircraft; provided, provided that such insurance shall at all times while the Aircraft is subject to the Lien of the Indenture be for an amount (taking into account the self-insurance to the extent permitted by subsection (d) of this Exhibit B) not less than $9,000,000the amount payable under Section 5.06 (a) upon the occurrence of an Event of Loss; provided further, that, subject to compliance with subsection (d) of this Exhibit B, such all-risk property damage insurance covering Engines and Parts temporarily removed from an Airframe or an airframe or (in the case of Parts) an Engine need be obtained only to the extent available 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, the Lender Indenture Trustee shall hold promptly remit any payment received by made to it of any insurance proceeds in respect of such loss for the account of the Borrower to Owner or any other third party that is entitled to receive such proceeds. Except during a period a Default or Unless an Event of Default has occurred and is continuing, all losses will be adjusted by Owner with the insurers by the Borrower (giving due regard to the interests of the Lender)insurers. As between the Borrower Indenture Trustee and the LenderOwner, it is agreed that all insurance payments received as a the result of the occurrence of an Event of Loss will be applied as follows: (1) if such payments are received with respect to the Airframe (or the Airframe and the Engines installed thereon), payments as shall not exceed the aggregate amount required to be paid by the Borrower pursuant to Section 5.01 shall be applied in reduction of the Borrower's obligation to pay such amount, if not already paid by the Borrower, or, if already paid by the Borrower, shall be applied to reimburse the Borrower for its payment of such amount, and the balance, if any, of such payments remaining thereafter will be paid over to the Borrower; and (2) if such payments are received with respect to an Engine under the circumstances contemplated by Section 5.02, such payments shall be paid over to the Borrower, provided that the Borrower shall have fully performed or, concurrently therewith, will fully perform the terms of Section 5.02 with respect to the Event of Loss for which such payments are made. As between the Borrower and the Lender, the insurance payments for any property damage loss to any Airframe or any Engine not constituting an Event of Loss with respect thereto or with respect to an Event of Loss of an Engine shall be paid as follows: in the event that insurance proceeds received with respect to an event not constituting an Event of Loss do not exceed $250,000, the full amount thereof shall be paid to the Borrower, and if such insurance proceeds exceed $250,000, the full amount shall be paid to the Lender, to be held in trust for the account of the Borrower subject to the Lien of the Security Agreement covering the Aircraft of which such Airframe or Engine is a part, to reimburse the Borrower for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacements.

Appears in 1 contract

Samples: Indenture and Security Agreement (Us Airways Inc)

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Insurance Against Loss or Damage to the Aircraft. Except as provided in clause (a2) of this Section 2.03(b), the Borrower Grantor shall at all times maintain or cause to be maintained in effect, at its or any Permitted Lessee's expense, with insurers of recognized reputation and responsibility, "all-risk" aircraft hull insurance covering the Aircraft each Aircraft, Engine and Spare Engine and fire and extended coverage and "all-risk" coverage of 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, including, without limitation, war risk and governmental confiscation and expropriation and hijacking insurance, (if and to the extent that the Aircraft is operated outside the United States or Canada in an area where war risk insurance is customarily maintained by commercial operators), and fire, transit and extended coverage with respect to any Engines or Parts while removed from the Aircraft; provided, that such insurance shall at all times while such Aircraft, Engine or Spare Engine is subject to this Mortgage be for an amount not less than $9,000,000. In the Insured Amount for such Aircraft, 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 (in the case of Parts) an Engine or Spare Engine need be obtained only to the extent commercially available at a loss with respect to an engine reasonable cost (other than an Engineas reasonably determined by the Grantor) installed on the Airframe, the Lender shall hold any payment received and then regularly obtained by it of any insurance proceeds in respect of such loss for the account of the Borrower or any other third party that is entitled to receive such proceedsmajor U.S. airlines. Except during a period a Default or an Event of Default has occurred and is continuing, all All losses will be adjusted with the insurers by the Borrower Grantor (giving due regard to the interests of the LenderCollateral Agent and the Lenders) with the insurers; provided, however, that during a period when any Event of Default shall have occurred and be continuing, the Grantor shall not agree to any such adjustment without the consent of the Collateral Agent (other than in the case of losses with respect to Tranche 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) of the Tranche A and B Aircraft Mortgage). As between the Borrower Collateral Agent and the LenderGrantor, it is agreed that all proceeds of insurance payments maintained in compliance with the preceding paragraph and received as a the result of the occurrence of an Event of Loss will be applied as follows: (1) if such payments are received with respect remitted to the Airframe (or the Airframe Collateral Agent and the Engines installed thereon), payments as shall not exceed the aggregate amount required to be paid by the Borrower pursuant to Section 5.01 shall be applied in reduction of the Borrower's obligation to pay such amount, if not already paid by the Borrower, or, if already paid by the Borrower, shall be applied to reimburse the Borrower for its payment of such amount, and the balance, if any, of such payments remaining thereafter will be paid over to the Borrower; and (2) if such payments are received with respect to an Engine under the circumstances contemplated by manner described in Section 5.02, such payments shall be paid over to the Borrower, provided that the Borrower shall have fully performed or, concurrently therewith, will fully perform the terms of Section 5.02 with respect to the Event of Loss for which such payments are made. As between the Borrower and the Lender, the insurance payments for any property damage loss to any Airframe or any Engine not constituting an Event of Loss with respect thereto or with respect to an Event of Loss of an Engine shall be paid as follows: in the event that insurance proceeds received with respect to an event not constituting an Event of Loss do not exceed $250,000, the full amount thereof shall be paid to the Borrower, and if such insurance proceeds exceed $250,000, the full amount shall be paid to the Lender, to be held in trust for the account of the Borrower subject to the Lien of the Security Agreement covering the Aircraft of which such Airframe or Engine is a part, to reimburse the Borrower for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacements3.01 hereof.

Appears in 1 contract

Samples: Revolving Credit, Term Loan and Guaranty Agreement (Ual Corp /De/)

Insurance Against Loss or Damage to the Aircraft. (a) the Borrower Sublessee shall at all times maintain or cause to be maintained in effect, effect at its expense, with insurers of recognized responsibility, "all-risk" risk ground and flight aircraft hull insurance covering the Aircraft and "all-risk" risk ground and flight coverage of Engines and Parts while temporarily removed from the Aircraft and not replaced by similar components, 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 that the Aircraft is operated outside the United States or Canada in an area where war risk insurance is customarily maintained unless otherwise agreed by commercial operatorsSublessor), and fire, transit and extended coverage with respect to any Engines or Parts while removed from the Aircraft; provided, provided that such insurance shall at all times while the Aircraft is subject to this Sublease be for an amount 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 and the Owner Participant 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) shall provide that (A) in the event of a loss involving proceeds in excess of $9,000,000***, the proceeds in respect of such loss up to an amount equal to the Stipulated Loss Value for the Aircraft shall be payable to or at the 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 Sublessee shall arrange for any payment of insurance proceeds in respect of such loss to be held for the account of Sublessor whether such payment is made to Sublessee or any third party), it being understood and agreed that in the case of any payment to Sublessor or its designee otherwise than in respect of an Event of Loss, 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, or exercise such rights as it may have to cause to be paid, the amount of such payment to Sublessee or its order and (B) the entire amount of any loss involving proceeds of $*** 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 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 Head Lease) shall have occurred and be continuing and the insurers have been notified thereof by Sublessor, Head Lessor, (iii) 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 change is made in the insurance which adversely affects the interest of Sublessor, Head Lessor, or the Owner Participant, such cancellation, lapse or change shall not be effective as to Sublessor, Head Lessor, or the Owner Participant for thirty (30) days (seven (7) days in the case of hull war risk and allied perils coverage) after issuance to Sublessor, Head Lessor or the Owner 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, (iv) shall provide that in respect of the respective interests of Sublessor, Head Lessor and the Owner Participant in such policies the insurance shall not be invalidated by any action or inaction of Sublessee or any other Person and shall insure the respective interests of Sublessor, Head Lessor and the Owner Participant, as they appear, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Sublessee, (v) shall be primary without any right of contribution from any other insurance which is carried by Sublessor, Head Lessor or the Owner Participant, (vi) shall waive any right of subrogation of the insurers against Sublessor, Head Lessor and the Owner Participant, and (vii) 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 Owner Participant or Sublessee to the extent of any moneys due to Sublessor or the Owner Participant. In the case of a loss with respect to an engine (other than an Engine) installed on the Airframe, the Lender Sublessor or its designee shall hold any payment received by to it of any insurance proceeds in respect of such loss for the account of the Borrower Sublessee or any other third party that is entitled to receive such proceeds. Except during a period a Default or an Event of Default has occurred and is continuing, all losses will be adjusted with the insurers by the Borrower (giving due regard to the interests of the Lender). As between the Borrower Sublessor and the LenderSublessee, it is agreed that all insurance payments received as a the result of the occurrence of an Event of Loss will be applied as follows: (1) if such payments are received with respect to the Airframe (or the Airframe and the Engines installed thereon), payments as shall not exceed the aggregate amount required to be paid by the Borrower pursuant to Section 5.01 shall be applied in reduction of the Borrower's obligation to pay such amount, if not already paid by the Borrower, or, if already paid by the Borrower, shall be applied to reimburse the Borrower for its payment of such amount, and the balance, if any, of such payments remaining thereafter will be paid over to the Borrower; and (2) if such payments are received with respect to an Engine under the circumstances contemplated by Section 5.02, such payments shall be paid over to the Borrower, provided that the Borrower shall have fully performed or, concurrently therewith, will fully perform the terms of Section 5.02 with respect to the Event of Loss for which such payments are made. As between the Borrower and the Lender, the insurance payments for any property damage loss to any Airframe or any Engine not constituting an Event of Loss with respect thereto or with respect to an Event of Loss of an Engine shall be paid as follows: in the event that insurance proceeds received with respect to an event not constituting an Event of Loss do not exceed $250,000, the full amount thereof shall be paid to the Borrower, and if such insurance proceeds exceed $250,000, the full amount shall be paid to the Lender, to be held in trust for the account of the Borrower subject to the Lien of the Security Agreement covering the Aircraft of which such Airframe or Engine is a part, to reimburse the Borrower for accomplishing repairs and/or replacements as required, or to pay suppliers directly for such repairs and/or replacements.

Appears in 1 contract

Samples: Airline Services Agreement (Mair Holdings Inc)

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