Common use of Insurance Against Loss or Damage Clause in Contracts

Insurance Against Loss or Damage. (i) Except as provided in clause (ii) of this Section 2.03(b), and subject to the rights of Grantors to establish and maintain self-insurance in the manner and to the extent specified in Section 2.03(f) below, Grantors shall maintain, or cause to be maintained, in effect with insurers of recognized responsibility, at no expense to the Administrative Agent, all-risk aircraft hull insurance covering each Aircraft and Spare Engine and all-risk coverage with respect to any Engine, Spare Engine or Part while removed from an Airframe or airframe (or Engine, Spare Engine or engine (in the case of a Part)) (including, without limitation, war risk, hijacking and allied perils insurance, if and to the extent the same is maintained by a Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or Spare Engine is then in effect, by the Permitted Lessee) with respect to other similar aircraft and engines operated by such Grantor or such Permitted Lessee, as the case may be, on the same or similar routes or if such Aircraft, Engine or Spare Engine is being operated in any war zone or recognized or, in the applicable Grantor’s judgment, threatened areas of hostilities), that is of the type as from time to time applicable to aircraft operated by such Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or Spare Engine is then in effect, by the Permitted Lessee) of the same type as such Aircraft and Spare Engine; provided that such insurance (including the permitted self-insurance) in the case of such Aircraft and Spare Engine shall at all times while such Aircraft or Spare Engine is subject to this Mortgage be for an amount not less than the Insured Amount therefor. Any insurance amounts described in this clause (b)(i) which relate to the loss of an engine (other than an Engine or Spare Engine) shall be, if received by the Administrative Agent, paid over to the Person legally entitled thereto. Any policies carried in accordance with this Section 2.03(b) and any policies taken out in substitution or replacement for any such policies shall: (1) provide that any insurance proceeds payable for any loss or damage, with respect to any Aircraft, Engine or Spare Engine, together with accrued but unpaid interest thereon, shall be paid to the Administrative Agent (at such account and address as the Administrative Agent specifies) as follows: (a) if such insurance proceeds are in respect of an Event of Loss, or (b) if the insurer has received a notice from the Administrative Agent directing that such insurance proceeds shall be so paid to the Administrative Agent; otherwise all such insurance proceeds shall be payable to the applicable Grantor; (2) subject to the conditions of clause (3) below, provide that, in respect of the interests of the Additional Insureds in such policies, the insurance shall not be invalidated by any action or inaction of a Grantor, any Permitted Lessee, or any other Person (other than such Additional Insured or a Governmental Authority) and shall insure the Additional Insureds’ Interests as they appear, regardless of any breach or violation by a Grantor, any Permitted Lessee, or any other Person (other than such Additional Insured or a Governmental Authority) of any warranty, declaration or condition contained in such policies; (3) provide that if such insurance is cancelled for any reason, or if any change is made in the insurance that materially reduces the coverage (not including the amount if such amount exceeds the coverage required hereunder) certified in the insurance report delivered on the Closing Date to the Administrative Agent and each Lender or if such insurance is cancelled for nonpayment of premium, such cancellation or change shall not be effective as to the Additional Insureds for 30 days (or seven days, or such other period as is then customary in the industry, in the case of war risk, hijacking or allied perils coverage) after issuance to the Additional Insureds of written notice from or on behalf of such insurers of such cancellation or change; provided that in the case of any war risk, hijacking and allied perils hull insurance, if the same is directly or indirectly provided by the United States government, or any agency or regulatory body thereof, such notice shall be deemed delivered if published in the Federal Register; (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance; (5) provide that the insurers shall waive rights of (x) setoff, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Grantors have waived their rights by their agreement to indemnify the Additional Insureds pursuant to the Loan Documents; (6) if applicable, be primary without rights of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in any Aircraft, Engine or Spare Engine; and (7) include a 50/50 provisional claims settlement clause in the event that separate policies are maintained with respect to all-risk aircraft hull insurance and war risk, hijacking and allied perils hull insurance. The Administrative Agent shall be entitled to notify an insurer that insurance proceeds payable in respect of loss or damage shall be paid directly to the Administrative Agent as provided in clause (1) above, for deposit into an account maintained with the Administrative Agent subject to an Account Control Agreement, in the following circumstances: (1) an Event of Default has occurred and is continuing, (2) such insurance proceeds are in respect of an Event of Loss, or (3) such proceeds if paid to the applicable Grantor would be required to be deposited in such account maintained with the Administrative Agent subject to an Account Control Agreement in accordance with Section 2.12(a) of the Credit Agreement (all calculations thereunder and under Section 6.06 of the Credit Agreement to be performed in accordance with the Credit Agreement after giving effect to the Event of Loss or other circumstance giving rise to such insurance proceeds). For the avoidance of doubt, the parties agree that the Credit Agreement governs the right of the Grantors to receive and use any insurance proceeds so deposited with the Administrative Agent. (ii) During any period that an Airframe, an Engine or a Spare Engine is on the ground and not being flown, Grantors may carry or cause to be carried as to such non-flown Airframe, Engine or Spare Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 2.03(f), insurance otherwise conforming with the provisions of said clause (i) except that the scope of the risks covered and the type of insurance shall be the same as from time to time applicable to airframes and engines operated by Grantors (or, if a Permitted Lease in respect of such Aircraft is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown; provided that, subject to self-insurance to the extent permitted by Section 2.03(f), Grantors shall maintain or cause to be maintained insurance against risk of loss or damage to such non-flown Airframe, Engine or Spare Engine in an amount at least equal to the replacement value of such Airframe, Engine or Spare Engine.

Insurance Against Loss or Damage. (i) Except as provided in clause (ii) of this Section 2.03(b), and subject to the rights of Grantors to establish and maintain self-insurance in the manner and to the extent specified in Section 2.03(f) below, Grantors shall maintain, or cause to be maintained, in effect with insurers of recognized responsibility, at no expense to the Administrative Agent, all-risk aircraft hull insurance covering each Aircraft and Spare Engine and all-risk coverage with respect to any Engine, Spare Engine or Part while removed from an Airframe or airframe (or Engine, Spare Engine or engine (in the case of a Part)) (including, without limitation, war risk, hijacking and allied related perils insurance, if and to the extent the same is maintained by a Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or Spare Engine is then in effect, by the Permitted Lessee) with respect to other similar aircraft and engines operated by such Grantor or such Permitted Lessee, as the case may be, on the same or similar routes or if such Aircraft, Engine or Spare Engine is being operated in any war zone or area of recognized or, in the applicable Grantor’s judgment, or threatened areas of hostilities), that is of the type as from time to time applicable to aircraft operated by such Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or Spare Engine is then in effect, by the Permitted Lessee) of the same type as such Aircraft and Spare Engine; provided that such insurance (including the permitted self-insurance) in the case of such Aircraft and Spare Engine shall at all times while such Aircraft or and Spare Engine is subject to this Mortgage be for an amount not less than the greater of (x) 110% of the Appraised Value, if any, thereof set forth in the most recent Appraisal Report delivered before the date (or renewal date) of the applicable insurance policies and (y) the Insured Amount therefor. Any insurance amounts described in this clause (b)(i) which relate to the loss of an engine (other than an Engine or Spare Engine) shall be, if received by the Administrative Agent, paid over to the Person legally entitled thereto. Any policies carried in accordance with this Section 2.03(b) and any policies taken out in substitution or replacement for any such policies shall: (1) provide that any insurance proceeds payable for any loss or damage, with respect to any Aircraft, Engine or Spare Engine, together with accrued but unpaid interest thereon, shall be paid to the Administrative Agent (at such account and address as the Administrative Agent specifies) as follows: (a) if such insurance proceeds are in respect of an Event of Loss, or (b) if the insurer has received a notice from the Administrative Agent directing that such insurance proceeds shall be so paid to the Administrative Agent; otherwise all such insurance proceeds shall be payable to the applicable Grantor; (2) subject to the conditions of clause (3) below, provide that, in respect of the interests of the Additional Insureds in such policies, the insurance shall not be invalidated by any action or inaction of a Grantor, any Permitted Lessee, or any other Person (other than such Additional Insured or a Governmental Authority) and shall insure the Additional Insureds’ ' Interests as they appear, regardless of any breach or violation by a Grantor, any Permitted Lessee, or any other Person (other than such Additional Insured or a Governmental Authority) of any warranty, declaration or condition contained in such policies; (3) provide that if such insurance is cancelled for any reason, or if any change is made in the insurance that materially reduces the coverage (not including the amount if such amount exceeds the coverage required hereunder) certified in the insurance report delivered on the Closing Date to the Administrative Agent and each Lender or if such insurance is cancelled for nonpayment of premium, such cancellation or change shall not be effective as to the Additional Insureds for 30 days (or seven days, or such other period as is then customary in the industry, in the case of war risk, hijacking or allied related perils coverage) after issuance to receipt by the Additional Insureds of written notice from or on behalf of such insurers of such cancellation or change; provided that in the case of any war risk, hijacking and allied related perils hull insurance, if the same is directly or indirectly provided by the United States government, or any agency or regulatory body thereof, such notice shall be deemed delivered if published in the Federal Register; (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance; (5) provide that the insurers shall waive rights of (x) setoff, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Grantors have waived their rights by their its agreement to indemnify the Additional Insureds pursuant to the Loan Documents; (6) if applicable, be primary without rights of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in any Aircraft, Engine or Spare Engine; and and (7) include contain a “50/50 provisional claims settlement clause in the event that separate policies are maintained with respect to all-risk aircraft hull insurance and war risk, hijacking and allied perils hull insuranceclause” (AVN 103 or its equivalent). The Administrative Agent shall be entitled to notify an insurer that insurance proceeds payable in respect of loss or damage shall be paid directly to the Administrative Agent as provided in clause (1) above, for deposit into an account maintained with the Administrative Agent subject to an Account Control Agreement, in the following circumstances: (1) an Event of Default has occurred and is continuing, (2) such insurance proceeds are in respect of an Event of Loss, or (3) such proceeds if paid to the applicable Grantor would be required to be deposited in such account maintained with the Administrative Agent subject to an Account Control Agreement in accordance with Section 2.12(a) of the Credit Agreement (all calculations thereunder and under Section 6.06 of the Credit Agreement to be performed in accordance with the Credit Agreement after giving effect to the Event of Loss or other circumstance giving rise to such insurance proceeds). For the avoidance of doubt, doubt the parties agree that the Credit Agreement governs the right of the Grantors to receive and use any insurance proceeds so deposited with the Administrative Agent. (ii) During any period that an Airframe, Airframe or an Engine or a Spare Engine is on the ground and not being flown, Grantors may carry or cause to be carried as to such non-flown Airframe, Airframe or Engine or Spare Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 2.03(f), insurance otherwise conforming with the provisions of said clause (i) except that the scope of the risks covered and the type of insurance shall be the same as from time to time applicable to airframes and engines operated by Grantors (or, if a Permitted Lease in respect of such Aircraft is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown; provided that, subject to self-insurance to the extent permitted by Section 2.03(f), Grantors shall maintain or cause to be maintained insurance against risk of loss or damage to such non-flown Airframe, Airframe or Engine or Spare Engine in an amount at least equal to the replacement value of applicable amount required under Section 2.03(b) during such Airframe, period that such Airframe or Engine or Spare EngineEngine is on the ground and not being flown.

Insurance Against Loss or Damage. (i) Except as provided in clause (ii) of this Section 2.03(b), and subject to the rights of Grantors to establish and maintain self-insurance in the manner and to the extent specified in Section 2.03(f) below, Grantors shall maintain, or cause to be maintained, in effect with insurers of recognized responsibility, at no expense to the Administrative Collateral Agent, all-risk aircraft hull insurance covering each Aircraft and Spare Engine and all-risk coverage with respect to any Engine, Spare Engine or Part while removed from an Airframe or airframe (or Engine, Spare Engine or engine (in the case of a Part)) (including, without limitation, war risk, hijacking and allied related perils insurance, if and to the extent the same is maintained by a Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or Spare Engine is then in effect, by the Permitted Lessee) with respect to other similar aircraft and engines operated by such Grantor or such Permitted Lessee, as the case may be, on the same or similar routes or if such Aircraft, Engine or Aircraft and Spare Engine is being operated in any war zone or area of recognized or, in the applicable Grantor’s judgment, or threatened areas of hostilities), that is of the type as from time to time applicable to aircraft operated by such Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or and Spare Engine is then in effect, by the Permitted Lessee) of the same type as such Aircraft and Spare Engine; provided that such insurance (including the permitted self-insurance) in the case of such Aircraft and Spare Engine shall at all times while such Aircraft or and Spare Engine is subject to this Mortgage be for an amount not less than the greater of (x) 110% of the Appraised Value, if any, thereof set forth in the most recent Appraisal Report delivered before the date (or renewal date) of the applicable insurance policies, and (y) the Insured Amount therefor. Any insurance amounts described in this clause (b)(i) which relate to the loss of an engine (other than an Engine or Spare Engine) shall be, if received by the Administrative Collateral Agent, paid over to the Person legally entitled thereto. Any policies carried in accordance with this Section 2.03(b) and any policies taken out in substitution or replacement for any such policies shall: : (1) provide that any insurance proceeds payable for any loss or damage, with respect to any Aircraft, Engine Aircraft or Spare Engine, together with accrued but unpaid interest thereon, shall be paid to the First Lien Administrative Agent (at such account and address as the Administrative Agent specifies) as follows: at (a) if such insurance proceeds are in respect of an Event of Loss, or (b) if the insurer has received a notice from the Administrative Collateral Agent or the First Lien Collateral Agent directing that such insurance proceeds shall be so paid to the First Lien Administrative Agent (or, after the First Priority Obligations Payment Date, the Administrative Agent); otherwise all such insurance proceeds shall be payable to the applicable Grantor; ; (2) subject to the conditions of clause (3) below, provide that, in respect of the interests of the Additional Insureds in such policies, the insurance shall not be invalidated by any action or inaction of a Grantor, any Permitted Lessee, Grantor or any other Person (other than such Additional Insured or a Governmental AuthorityInsured) and shall insure the Additional Insureds’ Interests as they appear, regardless of any breach or violation by a Grantor, any Permitted Lessee, Grantor or any other Person (other than such Additional Insured or a Governmental AuthorityInsured) of any warranty, declaration or condition contained in such policies; ; (3) provide that if such insurance is cancelled canceled for any reason, or if any change is made in the insurance that materially reduces the coverage (not including the amount if such amount exceeds the coverage required hereunder) certified in the insurance report delivered on the Closing Date to the Administrative Collateral Agent and each Lender or if such insurance is cancelled allowed to lapse for nonpayment of premium, such cancellation cancellation, change or change lapse shall not be effective as to the Additional Insureds for 30 days (or seven days, or such other period as is then customary in the industry, in the case of war risk, hijacking or allied related perils coverage) after issuance to receipt by the Additional Insureds of written notice from or on behalf of such insurers of such cancellation cancellation, change or changelapse; provided that in the case of any war risk, hijacking and allied related perils hull insurance, if the same is directly or indirectly provided by the United States government, or any agency or regulatory body thereof, such notice shall be deemed delivered if published in the Federal Register; ; (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance; ; (5) provide that the insurers shall waive rights of (x) setoff, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Grantors have waived their rights by their its agreement to indemnify the Additional Insureds pursuant to the Loan Documents; ; (6) if applicable, be primary without rights of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in any Aircraft, Engine or Spare Engine; and (7) include a 50/50 provisional claims settlement clause in the event that separate policies are maintained with respect to all-risk aircraft hull insurance and war risk, hijacking and allied perils hull insurance. The Administrative Agent shall be entitled to notify an insurer that insurance proceeds payable in respect of loss or damage shall be paid directly to the Administrative Agent as provided in clause (1) above, for deposit into an account maintained with the Administrative Agent subject to an Account Control Agreement, in the following circumstances: (1) an Event of Default has occurred and is continuing, (2) such insurance proceeds are in respect of an Event of Loss, or (3) such proceeds if paid to the applicable Grantor would be required to be deposited in such account maintained with the Administrative Agent subject to an Account Control Agreement in accordance with Section 2.12(a) of the Credit Agreement (all calculations thereunder and under Section 6.06 of the Credit Agreement to be performed in accordance with the Credit Agreement after giving effect to the Event of Loss or other circumstance giving rise to such insurance proceeds). For the avoidance of doubt, the parties agree that the Credit Agreement governs the right of the Grantors to receive and use any insurance proceeds so deposited with the Administrative Agent. (ii) During any period that an Airframe, Airframe or an Engine or a Spare Engine is on the ground and not being flown, Grantors may carry or cause to be carried as to such non-flown Airframe, Airframe or Engine or Spare Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 2.03(f2.03(c), insurance otherwise conforming with the provisions of said clause (i) except that the scope of the risks covered and the type of insurance shall be the same as from time to time applicable to airframes and engines operated by Grantors (or, if a Permitted Lease in respect of such Aircraft is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown; provided that, subject to self-insurance to the extent permitted by Section 2.03(f2.03(c), Grantors shall maintain or cause to be maintained insurance against risk of loss or damage to such non-flown Airframe, Airframe or Engine or Spare Engine in an amount at least equal to the replacement value of applicable amount required under Section 2.03(b) during such Airframe, period that such Airframe or Engine or Spare EngineEngine is on the ground and not being flown.

Insurance Against Loss or Damage. (i) Except as provided in clause (ii) of this Section 2.03(b), and subject to the rights of Grantors to establish and maintain self-insurance in the manner and to the extent specified in Section 2.03(f) below, Grantors shall maintain, or cause to be maintained, in effect with insurers of recognized responsibility, at no expense to the Administrative Collateral Agent, all-risk aircraft hull insurance covering each Aircraft and Spare Engine and all-risk coverage with respect to any Engine, Spare Engine or Part while removed from an Airframe or airframe (or Engine, Spare Engine or engine (in the case of a Part)) (including, without limitation, war risk, hijacking and allied related perils insurance, if and to the extent the same is maintained by a Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or Spare Engine is then in effect, by the Permitted Lessee) with respect to other similar aircraft and engines operated by such Grantor or such Permitted Lessee, as the case may be, on the same or similar routes or if such Aircraft, Engine or Aircraft and Spare Engine is being operated in any war zone or area of recognized or, in the applicable Grantor’s judgment, or threatened areas of hostilities), that is of the type as from time to time applicable to aircraft operated by such Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or and Spare Engine is then in effect, by the Permitted Lessee) of the same type as such Aircraft and Spare Engine; provided that such insurance (including the permitted self-insurance) in the case of such Aircraft and Spare Engine shall at all times while such Aircraft or and Spare Engine is subject to this Mortgage be for an amount not less than the greater of (x) 110% of the Appraised Value, if any, thereof set forth in the most recent Appraisal Report delivered before the date (or renewal date) of the applicable insurance policies, and (y) the Insured Amount therefor. Any insurance amounts described in this clause (b)(i) which relate to the loss of an engine (other than an Engine or Spare Engine) shall be, if received by the Administrative Collateral Agent, paid over to the Person legally entitled thereto. Any policies carried in accordance with this Section 2.03(b) and any policies taken out in substitution or replacement for any such policies shall: (1) provide that any insurance proceeds payable for any loss or damage, with respect to any Aircraft, Engine Aircraft or Spare Engine, together with accrued but unpaid interest thereon, shall be paid to the Administrative Agent (at such account and address as the Administrative Collateral Agent specifies) as follows: : (a) if such insurance proceeds are in respect of an Event of Loss, or (b) if the insurer has received a notice from the Administrative Collateral Agent directing that such insurance proceeds shall be so paid to the Administrative Agent; otherwise all such insurance proceeds shall be payable to the applicable Grantor; (2) subject to the conditions of clause (3) below, provide that, in respect of the interests of the Additional Insureds in such policies, the insurance shall not be invalidated by any action or inaction of a Grantor, any Permitted Lessee, Grantor or any other Person (other than such Additional Insured or a Governmental AuthorityInsured) and shall insure the Additional Insureds’ Interests as they appear, regardless of any breach or violation by a Grantor, any Permitted Lessee, Grantor or any other Person (other than such Additional Insured or a Governmental AuthorityInsured) of any warranty, declaration or condition contained in such policies; (3) provide that if such insurance is cancelled canceled for any reason, or if any change is made in the insurance that materially reduces the coverage (not including the amount if such amount exceeds the coverage required hereunder) certified in the insurance report delivered on the Closing Date to the Administrative Collateral Agent and each Lender or if such insurance is cancelled allowed to lapse for nonpayment of premium, such cancellation cancellation, change or change lapse shall not be effective as to the Additional Insureds for 30 days (or seven days, or such other period as is then customary in the industry, in the case of war risk, hijacking or allied related perils coverage) after issuance to receipt by the Additional Insureds of written notice from or on behalf of such insurers of such cancellation cancellation, change or changelapse; provided that in the case of any war risk, hijacking and allied related perils hull insurance, if the same is directly or indirectly provided by the United States government, or any agency or regulatory body thereof, such notice shall be deemed delivered if published in the Federal Register; (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance; (5) provide that the insurers shall waive rights of (x) setoff, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Grantors have waived their rights by their its agreement to indemnify the Additional Insureds pursuant to the Loan Documents; (6) if applicable, be primary without rights of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in any Aircraft, Engine or Spare Engine; and (7) include contain a “50/50 provisional claims settlement clause in the event that separate policies are maintained with respect to all-risk aircraft hull insurance and war risk, hijacking and allied perils hull insuranceclause” (AVN 103 or its equivalent). The Administrative Collateral Agent shall be entitled to notify an insurer that insurance proceeds payable in respect of loss or damage shall be paid directly to the Administrative Agent as provided in clause (1) above, for deposit into an account maintained with the Administrative Agent subject to an Account a Full Control Agreement, in the following circumstances: (1) an Event of Default has occurred and is continuing, (2) such insurance proceeds are in respect of an Event of Loss, or (3) such proceeds if paid to the applicable Grantor would be required to be deposited in such account maintained with the Administrative Agent subject to an Account a Full Control Agreement in accordance with Section 2.12(a) of the Credit Agreement (all calculations thereunder and under Section 6.06 of the Credit Agreement to be performed in accordance with the Credit Agreement after giving effect to the Event of Loss or other circumstance giving rise to such insurance proceeds). For the avoidance of doubt, doubt the parties agree that the Credit Agreement governs the right of the Grantors to receive and use any insurance proceeds so deposited with the Administrative Agent. (ii) During any period that an Airframe, Airframe or an Engine or a Spare Engine is on the ground and not being flown, Grantors may carry or cause to be carried as to such non-flown Airframe, Airframe or Engine or Spare Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 2.03(f2.03(c), insurance otherwise conforming with the provisions of said clause (i) except that the scope of the risks covered and the type of insurance shall be the same as from time to time applicable to airframes and engines operated by Grantors (or, if a Permitted Lease in respect of such Aircraft is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown; provided that, subject to self-insurance to the extent permitted by Section 2.03(f2.03(c), Grantors shall maintain or cause to be maintained insurance against risk of loss or damage to such non-flown Airframe, Airframe or Engine or Spare Engine in an amount at least equal to the replacement value of applicable amount required under Section 2.03(b) during such Airframe, period that such Airframe or Engine or Spare EngineEngine is on the ground and not being flown.

Insurance Against Loss or Damage. (i) Except as provided in clause (ii) of this Section 2.03(b), and subject to the rights of Grantors to establish and maintain self-insurance in the manner and to the extent specified in Section 2.03(f) below, Grantors shall maintain, or cause to be maintained, in effect with insurers of recognized responsibility, at no expense to the Administrative Collateral Agent, all-risk aircraft hull insurance covering each Aircraft and Spare Engine and all-risk coverage with respect to any Engine, Spare Engine or Part while removed from an Airframe or airframe (or Engine, Spare Engine or engine (in the case of a Part)) (including, without limitation, war risk, hijacking and allied related perils insurance, if and to the extent the same is maintained by a Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or Spare Engine is then in effect, by the Permitted Lessee) with respect to other similar aircraft and engines operated by such Grantor or such Permitted Lessee, as the case may be, on the same or similar routes or if such Aircraft, Engine or Aircraft and Spare Engine is being operated in any war zone or area of recognized or, in the applicable Grantor’s judgment, or threatened areas of hostilities), that is of the type as from time to time applicable to aircraft operated by such Grantor (or, if a Permitted Lease in respect of such Airframe, Engine or and Spare Engine is then in effect, by the Permitted Lessee) of the same type as such Aircraft and Spare Engine; provided that such insurance (including the permitted self-insurance) in the case of such Aircraft and Spare Engine shall at all times while such Aircraft or and Spare Engine is subject to this Mortgage be for an amount not less than the greater of (x) 110% of the Appraised Value, if any, thereof set forth in the most recent Appraisal Report delivered before the date (or renewal date) of the applicable insurance policies, and (y) the Insured Amount therefor. Any insurance amounts described in this clause (b)(i) which relate to the loss of an engine (other than an Engine or Spare Engine) shall be, if received by the Administrative Collateral Agent, paid over to the Person legally entitled thereto. Any policies carried in accordance with this Section 2.03(b) and any policies taken out in substitution or replacement for any such policies shall: (1) provide that any insurance proceeds payable for any loss or damage, with respect to any Aircraft, Engine Aircraft or Spare Engine, together with accrued but unpaid interest thereon, shall be paid to the First Lien Administrative Agent (at such account and address as the Administrative Agent specifies) as follows: at (a) if such insurance proceeds are in respect of an Event of Loss, or (b) if the insurer has received a notice from the Administrative Collateral Agent or the First Lien Collateral Agent directing that such insurance proceeds shall be so paid to the First Lien Administrative Agent (or, after the First Priority Obligations Payment Date, the Administrative Agent); otherwise all such insurance proceeds shall be payable to the applicable Grantor; (2) subject to the conditions of clause (3) below, provide that, in respect of the interests of the Additional Insureds in such policies, the insurance shall not be invalidated by any action or inaction of a Grantor, any Permitted Lessee, Grantor or any other Person (other than such Additional Insured or a Governmental AuthorityInsured) and shall insure the Additional Insureds’ Interests as they appear, regardless of any breach or violation by a Grantor, any Permitted Lessee, Grantor or any other Person (other than such Additional Insured or a Governmental AuthorityInsured) of any warranty, declaration or condition contained in such policies; (3) provide that if such insurance is cancelled canceled for any reason, or if any change is made in the insurance that materially reduces the coverage (not including the amount if such amount exceeds the coverage required hereunder) certified in the insurance report delivered on the Closing Date to the Administrative Collateral Agent and each Lender or if such insurance is cancelled allowed to lapse for nonpayment of premium, such cancellation cancellation, change or change lapse shall not be effective as to the Additional Insureds for 30 days (or seven days, or such other period as is then customary in the industry, in the case of war risk, hijacking or allied related perils coverage) after issuance to receipt by the Additional Insureds of written notice from or on behalf of such insurers of such cancellation cancellation, change or changelapse; provided that in the case of any war risk, hijacking and allied related perils hull insurance, if the same is directly or indirectly provided by the United States government, or any agency or regulatory body thereof, such notice shall be deemed delivered if published in the Federal Register; (4) provide that the Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance; (5) provide that the insurers shall waive rights of (x) setoff, counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any moneys due to the Additional Insureds and (y) subrogation against the Additional Insureds to the extent that Grantors have waived their rights by their its agreement to indemnify the Additional Insureds pursuant to the Loan Documents; (6) if applicable, be primary without rights of contribution from any other insurance carried by any Additional Insured with respect to its Interests as such in any Aircraft, Engine or Spare Engine; and and (7) include contain a “50/50 provisional claims settlement clause in the event that separate policies are maintained with respect to all-risk aircraft hull insurance and war risk, hijacking and allied perils hull insuranceclause” (AVN 103 or its equivalent). The Administrative Collateral Agent or the First Lien Collateral Agent shall be entitled to notify an insurer that insurance proceeds payable in respect of loss or damage shall be paid directly to the First Lien Administrative Agent (or, after the First Priority Obligations Payment Date, the Administrative Agent) as provided in clause (1) above, for deposit into an account maintained with the First Lien Administrative Agent (or, after the First Priority Obligations Payment Date, the Administrative Agent) subject to an Account a Full Control Agreement, in the following circumstances: (1) an Event of Default has occurred and is continuing, (2) such insurance proceeds are in respect of an Event of Loss, or (3) such proceeds if paid to the applicable Grantor would be required to be deposited in such account maintained with the Administrative Agent or the First Lien Administrative Agent subject to an Account a Full Control Agreement in accordance with the terms of the First Lien Credit Agreement or Section 2.12(a) of the First Lien Credit Agreement (or, after the First Priority Obligations Payment Date, Section 2.10(a) of the Credit Agreement) (all calculations thereunder and under Section 6.06 of the First Lien Credit Agreement (or, after the First Priority Obligations Payment Date, Section 6.06 of the Credit Agreement) to be performed in accordance with the First Lien Credit Agreement (or, after the First Priority Obligations Payment Date, the Credit Agreement) after giving effect to the Event of Loss or other circumstance giving rise to such insurance proceeds). For the avoidance of doubt, doubt the parties agree that the First Lien Credit Agreement governs and the Credit Agreement govern the right of the Grantors to receive and use any insurance proceeds so deposited with the Administrative Agent or the First Lien Administrative Agent. (ii) During any period that an Airframe, Airframe or an Engine or a Spare Engine is on the ground and not being flown, Grantors may carry or cause to be carried as to such non-flown Airframe, Airframe or Engine or Spare Engine, in lieu of the insurance required by clause (i) above, and subject to self-insurance to the extent permitted by Section 2.03(f2.03(c), insurance otherwise conforming with the provisions of said clause (i) except that the scope of the risks covered and the type of insurance shall be the same as from time to time applicable to airframes and engines operated by Grantors (or, if a Permitted Lease in respect of such Aircraft is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown; provided that, subject to self-insurance to the extent permitted by Section 2.03(f2.03(c), Grantors shall maintain or cause to be maintained insurance against risk of loss or damage to such non-flown Airframe, Airframe or Engine or Spare Engine in an amount at least equal to the replacement value of applicable amount required under Section 2.03(b) during such Airframe, period that such Airframe or Engine or Spare EngineEngine is on the ground and not being flown.