Common use of Event of Loss with Respect to an Engine Clause in Contracts

Event of Loss with Respect to an Engine. Upon the occurrence of an Event of Loss with respect to an Engine, the Company shall promptly (and in any event within ten (10) Business Days after such occurrence) give the Security Trustee written notice of such Event of Loss. The Company shall, within thirty (30) days after the occurrence of an Event of Loss with respect to an Engine give the Security Trustee written notice of its election to perform one of the following options (it being agreed that, if the Company shall not have given notice of such election within such 30-day period, the Company shall be deemed to have elected the option in clause (i) of the next sentence). The Company may elect either to (i) repay a principal amount of the Loan in an amount equal to the Stipulated Loss Value of such Engine (or Termination Value of such Engine, if Section 3.04(h)(3)(ii) of the Senior Mortgage is applicable), plus accrued interest thereon and any other amounts in accordance with Section 1.1(d) of the Loan Agreement (or, if the Lien of the Senior Mortgage has been discharged, pay to the Security Trustee, to be held by the Security Trustee as cash collateral under this Mortgage, an amount equal to the Stipulated Loss Value of such Engine, or Termination Value of such Engine if Section 3.04(i)(3)(ii) hereof is applicable), on or prior to the earlier of (A) the sixty-first (61st) day following the Event of Loss and (B) the third Business Day following the receipt of insurance proceeds with respect to such occurrence (but in any event not earlier than the date of the Company's election under the preceding sentence of this Section to make payment under this clause (i)), or (ii) cause to be subjected to the Lien of this Mortgage in replacement thereof not later than the sixtieth (60th) day following the occurrence of such Event of Loss, a Replacement Engine, owned by the Company and free and clear of all Liens except Permitted Liens; provided that if the Company does not perform its obligation to effect such replacement in accordance with this Section 3.04(a) during the period of time provided herein, then the Company shall be deemed to have elected to make the payment contemplated by clause (i) of this sentence within the period of time specified therein. The Company shall not be entitled to elect the replacement option pursuant to clause (ii) of the preceding sentence if, at the time the Company gives notice pursuant to the preceding sentence there shall have occurred and be continuing a Special Default or an Event of Default. A Replacement Engine for an Engine suffering an Event of Loss must meet each of the following conditions: (1) be of the same model as the Engine to be replaced thereby, or an improved model, manufactured by the same Engine Manufacturer; (2) have a value, utility and remaining useful life at least equal to and be in at least as good operating condition as, the Engine to be replaced thereby (assuming that such Engine was of the value and utility and in the condition and repair required by the terms hereof immediately prior to the occurrence of the Event of Loss); and (3) have been first placed in service after October 22, 1994, or, if different, meet whatever conditions or requirements as may be required in order for the Security Trustee to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to such Replacement Engine in the event of a case under Chapter 11 of the Bankruptcy Code in which the Company is a debtor; provided, however, that the requirement set forth in this subclause (3) shall not apply (A) with respect to the first Engine to suffer an Event of Loss, or (B) if, after giving effect to the replacement of the Engine suffering the Event of Loss by the Replacement Engine proposed by the Company, the ratio (both by number of Engines and by value) of Engines for which the Security Trustee is entitled to the benefits of Section 1110 of the Bankruptcy Code in the event of a case under Chapter 11 of the Bankruptcy Code in which the Company is a debtor to all Engines then subject to the Lien of this Mortgage is equal to or greater than the ratio of the Specified Engines to all Engines subject to the Lien of this Mortgage as of the Closing Date.

Event of Loss with Respect to an Engine. Upon the occurrence of an Event of Loss with respect to an Engine, the Company shall promptly (and Engine under --------------------------------------- circumstances in any event within ten (10) Business Days after such occurrence) give the Security Trustee written notice of such Event of Loss. The Company shall, within thirty (30) days after the occurrence of which there has not occurred an Event of Loss with respect to an Engine Airframe, the Borrower shall forthwith give the Security Trustee Administrative Agent, the Collateral Agent and the Lender written notice of its election to perform one of the following options (it being agreed that, if the Company shall not have given notice of such election within such 30-day period, the Company shall be deemed to have elected the option in clause (i) of the next sentence). The Company may elect either to (i) repay a principal amount of the Loan in an amount equal to the Stipulated Loss Value of such Engine (or Termination Value of such Engine, if Section 3.04(h)(3)(ii) of the Senior Mortgage is applicable), plus accrued interest thereon and any other amounts in accordance with Section 1.1(d) of the Loan Agreement (or, if the Lien of the Senior Mortgage has been discharged, pay to the Security Trustee, to be held by the Security Trustee as cash collateral under this Mortgage, an amount equal to the Stipulated Loss Value of such Engine, or Termination Value of such Engine if Section 3.04(i)(3)(ii) hereof is applicable), on or prior to the earlier of (A) the sixty-first (61st) day following the Event of Loss and (B) the third Business Day following the receipt of insurance proceeds with respect to such occurrence thereof (but in any event not earlier than within ten days of such occurrence) and shall, within 60 days after the date occurrence of such Event of Loss (or, in the case of an Event of Loss described in clause (vi) of the Companydefinition thereof, within 90 days after the Chief Financial Officer, Treasurer, any Vice President or other officer of the Borrower elected by the Borrower's election under the preceding sentence Board of this Section to make payment under this clause (i)Directors has received actual knowledge of such Event of Loss), or (ii) cause as replacement for the Engine with respect to be subjected which such Event of Loss occurred, subject to the Lien of this Mortgage another CFM International, Inc. Model CFM56-5B5/P engine (or an engine of the same manufacturer of an equivalent or an improved model and suitable for installation and use on the Airframes and compatible with the other Engines mortgaged hereunder) free and clear of all Liens (other than Inchoate Liens) and having a value and utility at least equal to, and being in replacement thereof not later than as good an operating condition, as the sixtieth (60th) day following the occurrence of Engine subject to such Event of Loss, assuming such Engine was maintained in accordance with the provisions of this Mortgage. Prior to or at the time of any such conveyance, the Borrower will (i) cause a Mortgage Supplement with respect to such Replacement Engine to be duly executed and filed for recording pursuant to the Federal Aviation Act, (ii) furnish the Administrative Agent and Collateral Agent with an opinion of the Borrower's counsel to the effect that such Replacement Engine is owned by Borrower free and clear of all Liens (other than Inchoate Liens), and that upon execution and filing of the Mortgage Supplement or other required document the Replacement Engine will be subject to the Lien of the Mortgage on a first priority and perfected basis; provided that, in the case of any such Lien which ranks on par with or ahead in priority to the Lien of the Mortgage, the Borrower may satisfy the foregoing requirement if the Borrower shall have provided a bond or other security in respect of such Lien in an amount and under terms reasonably satisfactory to the Administrative Agent at the direction of the Lender, (iii) furnish a certificate signed by a duly authorized officer of the Borrower stating with respect to any Replacement Engine: (1) a description of the Engine suffering the Event of Loss, owned which shall be identified by manufacturer's serial number; (2) a description of the Company Replacement Engine (including the manufacturer's name and serial number); (3) that on the date of the Mortgage Supplement relating to the Replacement Engine the Borrower will be the owner of such Replacement Engine free and clear of all Liens except Permitted Liens; provided , that if the Company does not perform its obligation such Replacement Engine will be on such date in good working order (subject to effect maintenance permitted or required by this Mortgage) and condition and that such replacement in accordance with this Section 3.04(a) during the period of time provided herein, then the Company shall be deemed to have elected to make the payment contemplated by clause (i) of this sentence within the period of time specified therein. The Company shall not be entitled to elect the replacement option pursuant to clause (ii) Replacement Engine is of the preceding sentence if, at the time the Company gives notice pursuant to the preceding sentence there shall have occurred and be continuing a Special Default same or an Event improved model of Default. A Replacement Engine for an Engine suffering an Event of Loss must meet the Engine; and (4) that each of the following conditions: (1) be of the same model as the Engine to be replaced thereby, or an improved model, manufactured by the same Engine Manufacturer; (2) have a value, utility conditions specified in this Section 5.02 and remaining useful life at least equal to and be in at least as good operating condition as, the Engine to be replaced thereby (assuming that such Engine was of the value and utility and in the condition and repair required by the terms hereof immediately prior to the occurrence of the Event of Loss); and (3) have been first placed in service after October 22, 1994, or, if different, meet whatever conditions or requirements as may be required in order for the Security Trustee to be entitled to the benefits of Section 1110 of the Bankruptcy Code 10.01 with respect to such Replacement Engine in has been satisfied and (iv) furnish the event Administrative Agent and the Collateral Agent with such evidence of a case under Chapter 11 compliance with the insurance provisions of the Bankruptcy Code in which the Company is a debtor; provided, however, that the requirement set forth in this subclause (3) shall not apply (A) Article VI hereof with respect to such Replacement Engine as the first Administrative Agent or the Collateral Agent may reasonably request. Upon compliance by the Borrower with all of the terms of this Section 5.02 and Section 13(a) of the Credit Agreement such Engine shall thereupon cease to suffer be an Event of LossEngine secured hereunder. For all purposes hereof, or (B) ifeach such Replacement Engine shall, after giving effect to the replacement of the Engine suffering the Event of Loss by the Replacement Engine proposed by the Companysuch conveyance, the ratio (both by number of Engines and by value) of Engines for which the Security Trustee is entitled to the benefits of Section 1110 of the Bankruptcy Code in the event of a case under Chapter 11 of the Bankruptcy Code in which the Company is a debtor to all Engines then subject to the Lien of this Mortgage is equal to or greater than the ratio of the Specified Engines to all Engines subject to the Lien of this Mortgage as of the Closing Datebe deemed an "Engine" hereunder.

Event of Loss with Respect to an Engine. Upon the occurrence of an Event of Loss with respect to an EngineEngine under circumstances in which there has not occurred an Event of Loss with respect to the Airframe, the Company Lessee shall promptly forthwith (and in any event event, within ten (10) Business Days fifteen days after such occurrence) give the Security Trustee Lessor written notice of such Event of Loss. The Company thereof and shall, within thirty sixty (3060) days after the occurrence of such Event of Loss, convey or cause to be conveyed to Lessor, as replacement for the Engine with respect to which such Event of Loss occurred, title to another [Pratt & Whitney Model PW4168A] [Pratt & Whitney Model PW2040] engi▇▇ (▇r engine of the same or ano▇▇▇▇ man▇▇▇▇▇▇▇er of the same, an equivalent or an improved model and suitable for installation and use on the Airframe without impairing the value, utility or remaining useful life of the Aircraft; provided that both Engines shall be of the same make and model) free and clear of all Liens (other than Permitted Liens, which engine may upon its transfer to Lessor become subject to any and all Permitted Liens) and having a value, utility and remaining useful life (without regard to hours or cycles) at least equal to the Engine subject to such Event of Loss assuming no Event of Loss had occurred and that such Engine had been maintained in accordance with this Lease. Prior to or at the time of any such conveyance, Lessee, at its own expense, will (i) furnish Lessor with a warranty (as to title) bill of sale, in form and substance reasonably satisfactory to Les▇▇▇, with respect to such replacement engine, (ii) cause a Lease Supplement and Trust Supplement to be duly executed by Lessee and to be filed for recording pursuant to the Federal Aviation Act, or the applicable laws, rules and regulations of any other jurisdiction in which the Airframe may then be registered as permitted by Section 8(f) of the Participation Agreement, (iii) furnish Lessor with such evidence of compliance with the insurance provisions of Section 11 hereof with respect to such replacement engine as Lessor may reasonably request and furnish Lessor with copies of the documentation required to be provided by Lessee pursuant to Section 5.06 of the Trust Indenture (whether or not the Trust Indenture is then in effect), and Lessor will comply with the terms of the Trust Indenture and transfer to or at the direction of Lessee without recourse or warranty (except as to absence of Lessor Liens, including for this purpose Liens which would be Lessor Liens but for the proviso in the definition of Lessor Liens) all of Lessor's right, title and interest, if any, in and to (A) the Engine with respect to which such Event of Loss occurred and furnish to or at the direction of Lessee a bill of sale in form and substance reasonably satisfactory to Less▇▇, evidencing such transfer and (B) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Event of Loss, and such Engine shall thereupon cease to be the Engine leased hereunder. For all purposes hereof, each such replacement engine shall, after such conveyance, be deemed part of the property leased hereunder, and shall be deemed an "Engine". No Event of Loss with respect to an Engine give the Security Trustee written notice of its election to perform one of the following options (it being agreed that, if the Company shall not have given notice of such election within such 30-day period, the Company shall be deemed to have elected the option in clause (i) of the next sentence). The Company may elect either to (i) repay a principal amount of the Loan in an amount equal to the Stipulated Loss Value of such Engine (or Termination Value of such Engine, if Section 3.04(h)(3)(ii) of the Senior Mortgage is applicable), plus accrued interest thereon and any other amounts in accordance with Section 1.1(d) of the Loan Agreement (or, if the Lien of the Senior Mortgage has been discharged, pay to the Security Trustee, to be held by the Security Trustee as cash collateral under this Mortgage, an amount equal to the Stipulated Loss Value of such Engine, or Termination Value of such Engine if Section 3.04(i)(3)(ii) hereof is applicable), on or prior to the earlier of (A) the sixty-first (61st) day following the Event of Loss and (B) the third Business Day following the receipt of insurance proceeds with respect to such occurrence (but in any event not earlier than the date of the Company's election under the preceding sentence of this Section to make payment under this clause (i)), or (ii) cause to be subjected to the Lien of this Mortgage in replacement thereof not later than the sixtieth (60th) day following the occurrence of such Event of Loss, a Replacement Engine, owned by the Company and free and clear of all Liens except Permitted Liens; provided that if the Company does not perform its obligation to effect such replacement in accordance with this Section 3.04(a) during the period of time provided herein, then the Company shall be deemed to have elected to make the payment circumstances contemplated by clause (i) of this sentence within the period of time specified therein. The Company shall not be entitled to elect the replacement option pursuant to clause (ii) of the preceding sentence if, at the time the Company gives notice pursuant to the preceding sentence there shall have occurred and be continuing a Special Default or an Event of Default. A Replacement Engine for an Engine suffering an Event of Loss must meet each of the following conditions: (1) be of the same model as the Engine to be replaced thereby, or an improved model, manufactured by the same Engine Manufacturer; (2) have a value, utility and remaining useful life at least equal to and be in at least as good operating condition as, the Engine to be replaced thereby (assuming that such Engine was of the value and utility and in the condition and repair required by the terms hereof immediately prior to the occurrence of the Event of Loss); and this paragraph (3) have been first placed in service after October 22, 1994, or, if different, meet whatever conditions or requirements as may be required in order for the Security Trustee to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to such Replacement Engine in the event of a case under Chapter 11 of the Bankruptcy Code in which the Company is a debtor; provided, however, that the requirement set forth in this subclause (3b) shall not apply (A) with respect to the first Engine to suffer an Event of Loss, or (B) if, after giving effect to the replacement of the Engine suffering the Event of Loss by the Replacement Engine proposed by the Company, the ratio (both by number of Engines and by value) of Engines for which the Security Trustee is entitled to the benefits of Section 1110 of the Bankruptcy Code result in the event of a case under Chapter 11 of the Bankruptcy Code any reduction in which the Company is a debtor to all Engines then subject to the Lien of this Mortgage is equal to or greater than the ratio of the Specified Engines to all Engines subject to the Lien of this Mortgage as of the Closing DateBasic Rent.

Event of Loss with Respect to an Engine. (a) Upon the occurrence of an Event of Loss with respect to an Engine, the Company shall promptly (and Engine under circumstances in any event within ten (10) Business Days after such occurrence) give the Security Trustee written notice of such Event of Loss. The Company shall, within thirty (30) days after the occurrence of which there has not occurred an Event of Loss with respect to an Engine the Airframe, the Borrower shall give the Security Trustee written notice of its election to perform one of the following options (it being agreed that, if the Company shall not have given notice of such election within such 30-day period, the Company shall be deemed to have elected the option in clause (i) of the next sentence). The Company may elect either to (i) repay a principal amount of the Loan in an amount equal to the Stipulated Loss Value of such Engine (or Termination Value of such Engine, if Section 3.04(h)(3)(ii) of the Senior Mortgage is applicable), plus accrued interest thereon and any other amounts in accordance with Section 1.1(d) of the Loan Agreement (or, if the Lien of the Senior Mortgage has been discharged, pay to the Security Trustee, to be held by the Security Trustee as cash collateral under this Mortgage, an amount equal to the Stipulated Loss Value of such Engine, or Termination Value of such Engine if Section 3.04(i)(3)(ii) hereof is applicable), on or prior to the earlier of (A) the sixty-first (61st) day following the Event of Loss and (B) the third Business Day following the receipt of insurance proceeds with respect to such occurrence Agent prompt (but in any event not earlier than the date of the Company's election under the preceding sentence of this Section to make payment under this clause within fifteen (i)), or 15) days) written notice thereof. Within one hundred twenty (ii120) cause to be subjected to the Lien of this Mortgage in replacement thereof not later than the sixtieth (60th) day following days after the occurrence of such Event of Loss (or, in the case of an Event of Loss described in clause (vi) of the definition thereof, within one hundred twenty (120) days after the Chief Financial Officer, Treasurer, any Vice President or other officer of the Borrower has received Actual Knowledge of such Event of Loss), as replacement for the Engine with respect to which such Event of Loss occurred, the Borrower shall subject to the Lien of this Security Agreement another ▇▇▇▇▇ & ▇▇▇▇▇▇▇ (also shown as ▇▇▇▇▇ & WHITNEY on the International Registry drop-down menu) Model PW4060 (also shown as PW 4000 94 on the International Registry drop-down menu) engine (or an engine of the same manufacturer of an equivalent or an improved model and suitable for installation and use on the Airframe and compatible with the other Engine mortgaged hereunder) (a “Replacement Engine”), in each case, free and clear of all Liens (other than Permitted Liens) and having a value, utility and remaining useful life (without regard to hours, cycles and maintenance schedule) at least equal to the Engine subject to such Event of Loss, assuming such Engine was maintained in accordance with the provisions of this Security Agreement. (b) [Intentionally omitted.] (c) Prior to or at the time of any substitution pursuant to Section 5.02(a) or 5.02(b), the Borrower will (i) cause a Security Agreement supplement with respect to such Replacement Engine to be duly executed and filed for recording pursuant to the Federal Aviation Act, or the applicable laws, rules and regulations of any other jurisdiction in which the Airframe may then be registered, and register or consent to the registration with the International Registry of the international interest in such Replacement Engine for the benefit of the Security Agent under this Security Agreement and the Security Agreement supplement referred to above (and the sale to Borrower of such Replacement Engine shall have been registered on the International Registry); (ii) furnish the Security Agent with an opinion or opinions of the Borrower’s counsel with a supporting priority search certificate issued by the International Registry to the effect that such Replacement Engine is free and clear of all Liens of record with the FAA and International Registry (other than Permitted Liens), and that upon execution and filing of the Security Agreement Supplement or other required document (which Borrower has caused to be prepared) the Replacement Engine will be subject to the Lien of the Security Agreement on a first priority (subject to Permitted Liens) and perfected basis (or, if the Aircraft is not then subject to U.S. registry, having the same priority and perfection required to be maintained under the Transaction Documents in respect of the property being so replaced) and that the registrations with the International Registry required under the preceding clause (i) have been made; (iii) furnish a certificate signed by a duly authorized officer of the Borrower stating (A) a description of the Engine suffering the Event of Loss, which shall be identified by manufacturer’s serial number, (B) a description of the Replacement Engine (including the manufacturer’s name and serial number), (C) that on the date of the Security Agreement supplement relating to the Replacement Engine, owned by the Company and Borrower will be the owner of such Replacement Engine, free and clear of all Liens except Permitted LiensLiens and (D) that such Replacement Engine will on such date meet the requirements of Section 5.02(a) hereof; provided that if (iv) furnish the Company does not perform its obligation to effect such replacement appropriate instruments, in accordance with this Section 3.04(a) during the period of time provided herein, then the Company shall be deemed to have elected to make the payment contemplated by clause (i) of this sentence within the period of time specified therein. The Company shall not be entitled to elect the replacement option pursuant to clause (ii) of the preceding sentence if, at the time the Company gives notice pursuant form and substance reasonably satisfactory to the preceding sentence there shall have occurred and be continuing a Special Default or an Event Security Agent, assigning to the Security Agent as additional collateral under this Security Agreement the benefit of Default. A manufacturer’s warranties with respect to such Replacement Engine for an and a certificate from a firm of independent aircraft appraisers reasonably satisfactory to the Security Agent confirming that such Replacement Engine suffering an Event of Loss must meet each of has at least the following conditions: (1) be of the same model as the Engine to be replaced thereby, or an improved model, manufactured by the same Engine Manufacturer; (2) have a value, utility and remaining useful life at least equal to and be is in at least as good an operating condition asas the corresponding Engine subject to such Event of Loss (in each case without taking into account hours, cycles and maintenance schedule); and (v) furnish the Engine to be replaced thereby (assuming that such Engine was Security Agent with a certificate of the value and utility and in the condition and repair required by the terms hereof immediately prior its regularly retained independent insurance broker to the occurrence effect that the insurance provisions of the Event of Loss); and (3) have been first placed in service after October 22, 1994, or, if different, meet whatever conditions or requirements as may be required in order for the Security Trustee to be entitled to the benefits of Section 1110 of the Bankruptcy Code Article VI with respect to such Replacement Engine in have been complied with. Upon compliance by the event of a case under Chapter 11 Borrower with all of the Bankruptcy Code in which the Company is a debtor; providedterms of this Section 5.02(c), however, that the requirement set forth in this subclause (3) shall not apply (A) with respect to the first Engine to suffer an Event of Loss, or (B) if, after giving effect to the replacement of the such Engine suffering the Event of Loss by shall thereupon cease to be an Engine secured hereunder, and, at the Replacement Engine proposed by the CompanyBorrower’s expense, the ratio (both by number of Engines Security Agent will execute such documents and by value) of Engines for which the Security Trustee is entitled provide its consent to the benefits of Section 1110 of the Bankruptcy Code in the event of a case under Chapter 11 of the Bankruptcy Code in which the Company is a debtor International Registry as Borrower shall request to all Engines then subject to release such Engine from the Lien of this Mortgage is equal to or greater than the ratio of the Specified Engines to Security Agreement. For all Engines subject to the Lien of this Mortgage as of the Closing Datepurposes hereof, each such Replacement Engine shall, after such compliance, be deemed an “Engine” hereunder.

Event of Loss with Respect to an Engine. Upon the occurrence of an Event of Loss with respect to an EngineEngine under circumstances in which there has not occurred an Event of Loss with respect to the Airframe, the Company Lessee shall promptly forthwith (and in any event event, within ten (10) Business Days fifteen days after such occurrence) give the Security Trustee Lessor written notice of such Event of Loss. The Company thereof and shall, within thirty sixty (3060) days after the occurrence of such Event of Loss, convey or cause to be conveyed to Lessor, as replacement for the Engine with respect to which such Event of Loss occurred, title to another [CFM International, Inc. Model CFM56-5A4/5A5] [▇▇▇▇▇ & Whitney Model PW2040] [▇▇▇▇▇ & ▇▇▇▇▇▇▇ Model PW4056] engine (or engine of the same or another manufacturer of the same, an equivalent or an improved model and suitable for installation and use on the Airframe without impairing the value, utility or remaining useful life of the Aircraft; PROVIDED that [both] [all] Engines shall be of the same make and model) free and clear of all Liens (other than Permitted Liens, which engine may upon its transfer to Lessor become subject to any and all Permitted Liens) and having a value, utility and remaining useful life (without regard to hours or cycles) at least equal to the Engine subject to such Event of Loss assuming no Event of Loss had occurred and that such Engine had been maintained in accordance with this Lease. Prior to or at the time of any such conveyance, Lessee, at its own expense, will (i) furnish Lessor with a warranty (as to title) ▇▇▇▇ of sale, in form and substance reasonably satisfactory to Lessor, with respect to such replacement engine, (ii) cause a Lease Supplement and Trust Supplement to be duly executed by Lessee and to be filed for recording pursuant to the Federal Aviation Act, or the applicable laws, rules and regulations of any other jurisdiction in which the Airframe may then be registered as permitted by Section 8(f) of the Participation Agreement, (iii) furnish Lessor with such evidence of compliance with the insurance provisions of Section 11 hereof with respect to such replacement engine as Lessor may reasonably request and furnish Lessor with copies of the documentation required to be provided by Lessee pursuant to Section 5.06 of the Trust Indenture (whether or not the Trust Indenture is then in effect), and Lessor will comply with the terms of the Trust Indenture and transfer to or at the direction of Lessee without recourse or warranty (except as to absence of Lessor Liens, including for this purpose Liens which would be Lessor Liens but for the proviso in the definition of Lessor Liens) all of Lessor's right, title and interest, if any, in and to (A) the Engine with respect to which such Event of Loss occurred and furnish to or at the direction of Lessee a ▇▇▇▇ of sale in form and substance reasonably satisfactory to Lessee, evidencing such transfer and (B) all claims, if any, against third parties, for damage to or loss of the Engine subject to such Event of Loss, and such Engine shall thereupon cease to be the Engine leased hereunder. For all purposes hereof, each such replacement engine shall, after such conveyance, be deemed part of the property leased hereunder, and shall be deemed an "ENGINE". No Event of Loss with respect to an Engine give the Security Trustee written notice of its election to perform one of the following options (it being agreed that, if the Company shall not have given notice of such election within such 30-day period, the Company shall be deemed to have elected the option in clause (i) of the next sentence). The Company may elect either to (i) repay a principal amount of the Loan in an amount equal to the Stipulated Loss Value of such Engine (or Termination Value of such Engine, if Section 3.04(h)(3)(ii) of the Senior Mortgage is applicable), plus accrued interest thereon and any other amounts in accordance with Section 1.1(d) of the Loan Agreement (or, if the Lien of the Senior Mortgage has been discharged, pay to the Security Trustee, to be held by the Security Trustee as cash collateral under this Mortgage, an amount equal to the Stipulated Loss Value of such Engine, or Termination Value of such Engine if Section 3.04(i)(3)(ii) hereof is applicable), on or prior to the earlier of (A) the sixty-first (61st) day following the Event of Loss and (B) the third Business Day following the receipt of insurance proceeds with respect to such occurrence (but in any event not earlier than the date of the Company's election under the preceding sentence of this Section to make payment under this clause (i)), or (ii) cause to be subjected to the Lien of this Mortgage in replacement thereof not later than the sixtieth (60th) day following the occurrence of such Event of Loss, a Replacement Engine, owned by the Company and free and clear of all Liens except Permitted Liens; provided that if the Company does not perform its obligation to effect such replacement in accordance with this Section 3.04(a) during the period of time provided herein, then the Company shall be deemed to have elected to make the payment circumstances contemplated by clause (i) of this sentence within the period of time specified therein. The Company shall not be entitled to elect the replacement option pursuant to clause (ii) of the preceding sentence if, at the time the Company gives notice pursuant to the preceding sentence there shall have occurred and be continuing a Special Default or an Event of Default. A Replacement Engine for an Engine suffering an Event of Loss must meet each of the following conditions: (1) be of the same model as the Engine to be replaced thereby, or an improved model, manufactured by the same Engine Manufacturer; (2) have a value, utility and remaining useful life at least equal to and be in at least as good operating condition as, the Engine to be replaced thereby (assuming that such Engine was of the value and utility and in the condition and repair required by the terms hereof immediately prior to the occurrence of the Event of Loss); and this paragraph (3) have been first placed in service after October 22, 1994, or, if different, meet whatever conditions or requirements as may be required in order for the Security Trustee to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to such Replacement Engine in the event of a case under Chapter 11 of the Bankruptcy Code in which the Company is a debtor; provided, however, that the requirement set forth in this subclause (3b) shall not apply (A) with respect to the first Engine to suffer an Event of Loss, or (B) if, after giving effect to the replacement of the Engine suffering the Event of Loss by the Replacement Engine proposed by the Company, the ratio (both by number of Engines and by value) of Engines for which the Security Trustee is entitled to the benefits of Section 1110 of the Bankruptcy Code result in the event of a case under Chapter 11 of the Bankruptcy Code any reduction in which the Company is a debtor to all Engines then subject to the Lien of this Mortgage is equal to or greater than the ratio of the Specified Engines to all Engines subject to the Lien of this Mortgage as of the Closing DateBasic Rent.

Event of Loss with Respect to an Engine. Upon the occurrence of an Event of Loss with respect to an Engine, the Company shall promptly (and in any event within ten (10) Business Days after such occurrence) give the Security Trustee Secured Party written notice of such Event of Loss. The Company shall, within thirty (30) days after the occurrence of an Event of Loss with respect to an Engine give the Security Trustee Secured Party written notice of its election to perform one of the following options (it being agreed that, if the Company shall not have given notice of such election within such 30-day period, the Company shall be deemed to have elected the option in clause (i) of the next sentence). The Company may elect either to (i) repay a principal amount of the Series A Loan in an amount equal to the Stipulated Loss Value of such Engine (or Termination Value of such Engine, if Section 3.04(h)(3)(ii) of the Senior Mortgage is applicable), plus accrued interest thereon and any other amounts in accordance with Section 1.1(d) of the Loan Agreement (or, if the Lien of the Senior Mortgage has been discharged, pay to the Security Trustee, to be held by the Security Trustee as cash collateral under this Mortgage, an amount equal to the Stipulated Loss Value of such Engine, or Termination Value of such Engine if Section 3.04(i)(3)(ii) hereof is applicable)Agreement, on or prior to the earlier of (A) the sixtyninety-first (61st91st) day following the Event of Loss and (B) the third second Business Day following the receipt of insurance proceeds with respect to such occurrence (but in any event not earlier than the date of the Company's ’s election under the preceding sentence of this Section to make payment under this clause (i)), or (ii) cause to be subjected to the Lien of this Mortgage in replacement thereof not later than the sixtieth ninetieth (60th90th) day following the occurrence of such Event of Loss, a Replacement Engine, owned by the Company and free and clear of all Liens except Permitted Liens; provided that if the Company does not perform its obligation to effect such replacement in accordance with this Section 3.04(a) during the period of time provided herein, then the Company shall be deemed to have elected to make the payment contemplated by clause (i) of this sentence within the period of time specified therein. The Company shall not be entitled to elect the replacement option pursuant to clause (ii) of the preceding sentence if, at the time the Company gives notice pursuant to the preceding sentence there shall have occurred and be continuing a Special Default or an Event of Default. A Replacement Engine for an Engine suffering an Event of Loss must meet each of the following conditions: (1) be of the same model as the Engine to be replaced thereby, or an improved model, manufactured by the same Engine Manufacturer; (2) have a value, utility and remaining useful life life, at least equal to to, and be is in at least as good operating condition as, the Engine to be replaced thereby (assuming that such Engine was of the value and utility and in the condition and repair required by the terms hereof immediately prior to the occurrence of the Event of Loss). In determining the value, utility and remaining useful life of a Replacement Engine, hours and cycles since original delivery or last major overhaul, whichever is later, shall be considered; and (3) have been first placed in service after October 22, 1994, or, if different, meet whatever conditions or requirements as may be required in order for the Security Trustee Secured Party to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to such Replacement Engine in the event of a case under Chapter 11 of the Bankruptcy Code in which the Company is a debtor; provided, however, that the requirement set forth in this subclause (3) shall not apply (A) with respect to the first Engine to suffer an Event of Loss, or (B) if, after giving effect to the replacement of the Engine suffering the Event of Loss by the Replacement Engine proposed by the Company, the ratio (both by number of Engines and by value) of Engines for which the Security Trustee is entitled to the benefits of Section 1110 of the Bankruptcy Code in the event of a case under Chapter 11 of the Bankruptcy Code in which the Company is a debtor to all Engines then subject to the Lien of this Mortgage is equal to or greater than the ratio of the Specified Engines to all Engines subject to the Lien of this Mortgage as of the Closing Date.