Common use of Event of Loss Clause in Contracts

Event of Loss. (i) If an Event of Loss shall occur with respect to an Airframe or an Engine, Company will promptly notify Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 days after the receipt of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine", as the case may be, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.

Event of Loss. (ia) If an Upon the occurrence or happening of any Event of Loss in respect of a Collateral Vessel (such Collateral Vessel, the “Lost Mortgaged Collateral Vessel”), and the receipt of Event of Loss Proceeds in respect thereof, the Borrowers shall occur with respect cause all such Event of Loss Proceeds to an Airframe or an Engine, Company will promptly notify be deposited into a deposit account controlled by the Collateral Agent thereof in writing (in any event within five (5) days Business Days of receipt thereof and held as Collateral subject to a Lien under the Collateral Agreements pending the application of such occurrencefunds in accordance with the terms of this Section 4.02. If the Administrative Agent receives any Event of Loss Proceeds, then, so long as an Event of Default has not occurred and is continuing, the Administrative Agent shall cause such proceeds to be deposited into a deposit account controlled by the Collateral Agent and held as Collateral subject to a Lien under the Collateral Agreements pending the application of such funds by the Borrowers in accordance with the terms of this Section 4.02. (b) and will, not later than 180 Within 365 days (subject to extension as provided in Section 4.02(c)) after the receipt of Proceeds in connection with such any Event of Loss, mortgage hereunder, by complying with all Loss Proceeds (or such fewer number of the terms of subsection (ii) below and otherwise taking all days as are necessary actions to provide ensure that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe Proceeds are not required to be utilized in respect of an asset sale offer or Acceptable Alternate Engine shall thereupon constitute an "Airframe" similar offer to repay, repurchase or an "Engine"redeem Indebtedness pursuant to any instrument governing Indebtedness of any Borrower or any Guarantor), the Borrowers or the applicable Guarantor, as the case may be, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to apply such Event of Loss Proceeds at its option to any combination of the following: (1) to acquire and substitute one or more Substitute Vessels (and to make any Permitted Repairs with respect thereto) for such Lost Mortgaged Collateral Vessel and make each such Substitute Vessel subject to a Ship Mortgage pursuant to which the Collateral Agent shall obtain a Lien, on a first-priority basis (subject to Permitted Collateral Liens), on such Substitute Vessel for the benefit of itself, the Administrative Agent and the other Secured Parties; or (2) make an Event of Loss Offer in accordance with the terms hereof. (c) A binding commitment to apply Event of Loss Proceeds from an Event of Loss in accordance with clause (b)(1) above shall toll the 365-day period in respect of such Event of Loss Proceeds for a period not to exceed 365 days from the expiration of the aforementioned 365-day period so long as such Event of Loss Proceeds are actually used within the later of 365 days from their receipt from such Event of Loss or 365 days from the date of such binding commitment. (d) (i) Any Event of Loss Proceeds that have not been previously applied or invested as provided in Section 4.02(b) will constitute “Excess Loss Proceeds”. Subject to Section 4.10, when the aggregate amount of Excess Loss Proceeds exceeds $50,000,000, the Term Borrowers shall, or shall cause the applicable Guarantor to, within 10 Business Days thereof, make an offer (an “Event of Loss Offer”), solely to the Term Lenders, to repay or purchase the maximum principal amount of Term Loans in an amount (the “Event of Loss Offer Amount”) equal to the lesser of (A) 100% of such Excess Loss Proceeds and (B) the product of (1) the ratio of (x) the Fair Market Value of the Lost Mortgaged Collateral Vessel to (y) the Fair Market Value of all Collateral, in each case, calculated immediately prior to such the applicable Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, Loss and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment aggregate principal amount of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if Term Loans outstanding at the time of such payment or retention Event of Loss. The offer price for the Term Loans in any Event of Default or a Potential Event of Default shall have occurred and be continuing, but Loss Offer shall be held by or paid over equal to Agent as security for 100% of the obligations of Company under this Mortgage outstanding principal amount, plus accrued and the other Loan Documents, andunpaid interest, if Agent shall declare any, on the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company Term Loans repaid to the extent not previously applied applicable repayment date, payable in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documentscash.

Event of Loss. (i) If an Event of Loss shall occur with respect to an Airframe or an Engine, Company will promptly notify Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 days after the receipt of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine", as the case may be, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and, (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage., and (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided pro- vided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.

Event of Loss. Within three (3) days of receipt by the Borrower, the Guarantor, the Agent, the Collateral Agent or any of the Lenders of any casualty insurance proceeds or any condemnation or other similar proceeds from any governmental authority or any other Person, from any Event of Loss (the "Insurance Receipt Date"), the Borrower may, upon written notice to the Agent (who shall promptly provide such notice to the Lenders), elect to reconstruct the Drillship or the Rig, as applicable, with the Event of Loss Proceeds so long as (i) If an (x) if such Event of Loss shall occur with respect occurs before the Conversion Date, such reconstruction can be completed before the Conversion Date as reasonably determined by the Borrower at such time and as demonstrated to an Airframe the reasonable satisfaction of the Agent, or an Engine, Company will promptly notify Agent thereof in writing (in any event within five (5y) days if such Event of such occurrence) and will, not later than 180 days Loss occurs after the receipt Conversion Date, such reconstruction can be completed within eighteen (18) months from the date of Proceeds in connection with such Event of Loss, mortgage hereunder, as reasonably determined by complying with all the Borrower at such time and as demonstrated to the reasonable satisfaction of the terms Agent, in which event all Event of subsection Loss Proceeds shall be segregated and held by the Collateral Agent and made available by the Collateral Agent to the Borrower for such purpose, using contractors, plans and specifications and methods substantially in accordance with the Functional Requirements as reasonably satisfactory to the Agent and the Majority Lenders, and for the payment of the Obligations, any LSF Obligations and the Swap Obligations, (ii) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe not caused or Acceptable Alternate Engine shall thereupon constitute an "Airframe" is not reasonably likely to cause either of the Amoco Contracts or an "Engine"any Substitute Contracts to terminate or cancel (with no obligation to pay a cancellation fee and other than pursuant to the Free Cancellation Right) and Amoco or such substitute contracting party, as the case may beapplicable, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine provides written confirmation to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), Company Agent that it will on or prior thereto: (A) deliver continue to Agent and duly file for recording under lease the Act, a Supplemental Chattel Mortgage substantially in applicable vessel at the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as end of such date of execution with respect reconstruction period pursuant and subject to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f)such applicable contract for the full stated term thereof, no Potential Event (iii) the Collateral Agent is provided a security interest in any construction contract and any letter of Default credit or Event of Default will exist; and (III) that all conditions precedent contemplated other collateral provided to the Borrower or the Guarantor in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with connection therewith on terms substantially similar to the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine applicable Security Documents and otherwise as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect the Agent, (iv) the Guarantor executes and delivers a new performance guaranty of the reconstruction thereof containing terms substantially similar to the applicable portions of the Transocean Performance Guaranty and otherwise as reasonably satisfactory to the Agent, (v) the Borrower shall be able to obtain loss of hire insurance for such Airframe or Engine; (F) furnish Agent with such evidence of title such vessel after the reconstruction period therefor as the bill ▇▇ sale as Agent may then reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal determined by the Approved Appraisers relating Borrower and as demonstrated to the Airframe or Engine to be subjected reasonable satisfaction of the Agent, and (vi) the Borrower shall demonstrate to the lien and reasonable satisfaction of the security interest of this Mortgage stating Agent that it has shall be able to timely pay its Obligations hereunder and any "true-up" costs and expenses payable to any Swap Parties as a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to result of such Event of Loss immediately prior to and such Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage determined reconstruction period under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company Interest Rate Protection Agreement as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement Section 6.10 and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of no Default or a Potential Event of Default shall have occurred and be continuing. If the Borrower elects not to, but shall be held by or paid over is unable pursuant to Agent as security for the obligations of Company under this Mortgage terms and conditions hereof to, reconstruct or repair the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing applicable vessel with any such Event of Default Loss Proceeds, the Borrower shall within three (3) days of the Insurance Receipt Date, make a mandatory principal prepayment of (i) either (x) prior to the Conversion Date, the Financed Amount with respect to the applicable vessel, or Potential (y) the Vessel Amortization Payments of the Drillship or the Vessel Amortization Payments of the Rig, as applicable, in the case of both (x) and (y), after giving effect to any prior prepayments of the Borrower's Obligations hereunder as provided herein, and (ii) after the Conversion Date and if any LSF Loans are then outstanding, make a principal prepayment of the LSF Loans in an amount equal to the LSF Vessel Amortization Payments of the Drillship or the LSF Amortization Payments of the Rig, as applicable. Each such mandatory payment shall be accompanied by a payment of all accrued and unpaid interest on the Loans prepaid and any applicable breakage fees and funding losses pursuant to Section 2.13. The Borrower shall also pay any "true- up" costs and expenses payable to any Swap Parties as a result of such prepayment under the Interest Rate Protection Agreement as required pursuant to Section 6.10. Each such mandatory prepayment shall be applied to the Construction Loans and then to the Tranche A Loans, or to the required Vessel Amortization Payments with respect to the vessel the subject of such Event of DefaultLoss, such amount as applicable. Any Event of Loss Proceeds received at any time by the Borrower, the Guarantor, the Agent, the Collateral Agent or any of the Lenders shall (i) if received by any Person other than the Collateral Agent, forthwith be paid to Company turned over to the extent not previously Collateral Agent, or (ii) if received by the Collateral Agent (or turned over to the Collateral Agent pursuant to clause (i)), be applied as directed by the Borrower from time to time to the payment of Obligations (including without limitation to the mandatory prepayment provided for in this Section 2.11(c)), to the payment of LSF Obligations (including, without limitation, to any mandatory prepayment of LSF Loans required to be made under the Lease Securitization Facility as a result of such Event of Loss), if any, to the payment of Swap Obligations or to the payment of costs incurred in connection with the reconstruction of the Drillship or the Rig, as applicable, if undertaken in accordance with the preceding sentencethis Section 2.11(c). In addition, and whether or not there shall exist an Any Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be Loss Proceeds held by the Collateral Agent (i) if the Borrower elects to undertake the reconstruction of the Drillship or the Rig, as security applicable, after such reconstruction is completed as evidenced by a certificate from the Borrower certifying the completion of such reconstruction in form and substance reasonably satisfactory to the Agent and an Amoco Letter of Acceptance with respect thereto, or (ii) if the Borrower elects not to undertake the reconstruction of the Drillship or the Rig, as applicable, after the partial mandatory prepayment of (x) the Loans provided for in this Section 2.11(c), (y) any partial mandatory prepayment of the obligations LSF Loans, if any, required to be made under the Lease Securitization Facility as a result of Company such Event of Loss is made and (z) after payment of any "true-up" costs and expenses payable by the Borrower as a result of such prepayment under this Mortgage and the other Loan DocumentsInterest Rate Protection Agreement as required pursuant to Section 6.10 as a result of such Event of Loss, shall be released by the Collateral Agent to the Borrower upon demand.

Event of Loss. (i) If an Event of Loss shall occur with respect to an Airframe or an Engine, Company will promptly notify Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 days after the receipt of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine", as the case may be, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and, (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage., and (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.

Event of Loss. (ia) If an Event of Loss shall occur with respect to an Airframe or an Engine, Company Lessee will promptly notify Lessor and Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 days after the receipt occurrence of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue convey or cause to be entitled conveyed to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to belowLessor, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver Encumbrances) title to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such an Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine", as the case may be. Prior to or at the time of any such conveyance, for all purposes hereof and shall be deemed Lessee, at its own expense, will, as conditions to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph such transfer, (i) above), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent Lessor with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent Lessor, with respect to such Acceptable Alternate Airframe or Acceptable Alternate Engine; , (Fii) cause a Lease Supplement to be filed for recording pursuant to Title 49 of the United States Code, as amended, (iii) furnish Agent Lessor with such evidence of Lessee's title to such Acceptable Alternate Airframe or Acceptable Alternate Engine and of compliance with the insurance provisions of Section 14 hereof with respect to such Acceptable Alternate Airframe or Acceptable Alternate Engine as Lessor may reasonably request, (iv) furnish Lessor with an opinion of Lessee's counsel to the effect that title to such Acceptable Alternate Airframe or Acceptable Alternate Engine has been duly conveyed to Lessor free and clear of all Liens except Permitted Encumbrances and Lessor and Agent continue to have 1110 protection with respect to such Aircraft and (v) transfer to or at the direction of Lessee without recourse or warranty all of Lessor's right, title and interest, if any, in and to (A) the Airframe or Engine with respect to which such Event of Loss occurred and furnish to or at the direction of Lessee, at Lessee's expense, a bill ▇▇ sale as Agent may in form and substance reasonably request concerning satisfactory to Lessee, evidencing such Airframe transfer and (B) all claims, if any, against third parties, for damage to or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest loss of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior Loss, and such Airframe or Engine shall thereupon cease to be an Airframe or Engine leased hereunder. Lessee shall cooperate with Lessor and take all such actions as shall be requested by Lessor so that Lessor complies with Section 4(f) of the Aircraft Chattel Mortgage. For all purposes hereof, each such Acceptable Alternate Airframe or Acceptable Alternate Engine shall, after such conveyance, be deemed part of the property leased hereunder, and shall be deemed an "Airframe" or "Engine", as the case may be. No Event of Loss, assuming compliance Loss under the circumstance contemplated by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and paragraph (Ha) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described shall result in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest any reduction in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel MortgageBasic Rent. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iiib) With respect to the Airframe or any Engine, as between the Agent Lessor and CompanyLessee, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement14 below) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company Lessee pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Lease Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (iia) above and until such time shall be held by Agent in accordance with the provisions hereof Lessor as security for the Secured Obligationsobligations of Lessee under the Lease; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, so much of such payments as shall not exceed (A) the Stipulated Loss Value as of the date of payment plus (B) all unpaid Supplemental Rent due through the date of payment, plus (C) all unpaid Basic Rent for the period ending on the date of payment shall be applied paid by Lessee to Lessor and following the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgageforegoing application, and the balance, if any, of such payments shall be paid over to or retained by Company. distributed between Lessee and Lessor as their respective interests may appear; (ivc) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company Lessee shall promptly notify Lessor and Agent of such requisition and all of CompanyLessee's obligations under this Mortgage the Lease shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent Lessor or Company Lessee from the United States Government for the use of the Airframe or such Engine, to the extent allocable to the Term, shall be paid over to, or retained by, CompanyLessee. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.

Event of Loss. (ia) If an Upon the occurrence or happening of any Event of Loss in respect of a Collateral Vessel (such Collateral Vessel, the “Lost Mortgaged Collateral Vessel”), and the receipt of Event of Loss Proceeds in respect thereof, the Borrowers shall occur with respect cause all such Event of Loss Proceeds to an Airframe or an Engine, Company will promptly notify be deposited into a deposit account controlled by the Collateral Agent thereof in writing (in any event within five (5) days Business Days of receipt thereof and held as Collateral subject to a Lien under the Collateral Agreements pending the application of such occurrencefunds in accordance with the terms of this Section 4.02. If the Administrative Agent receives any Event of Loss Proceeds, then, so long as an Event of Default has not occurred and is continuing, the Administrative Agent shall cause such proceeds to be deposited into a deposit account controlled by the Collateral Agent and held as Collateral subject to a Lien under the Collateral Agreements pending the application of such funds by the Borrowers in accordance with the terms of this Section 4.02. (b) and will, not later than 180 Within 365 days (subject to extension as provided in Section 4.02(c)) after the receipt of Proceeds in connection with such any Event of Loss, mortgage hereunder, by complying with all Loss Proceeds (or such fewer number of the terms of subsection (ii) below and otherwise taking all days as are necessary actions to provide ensure that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe Proceeds are not required to be utilized in respect of an asset sale offer or Acceptable Alternate Engine shall thereupon constitute an "Airframe" similar offer to repay, repurchase or an "Engine"redeem Indebtedness pursuant to any instrument governing Indebtedness of any Borrower or any Guarantor), the Borrowers or the applicable Guarantor, as the case may be, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to apply such Event of Loss immediately prior Proceeds at its option to such Event any combination of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, statingfollowing: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorizedto acquire and substitute one or more Substitute Vessels (and to make any Permitted Repairs with respect thereto) for such Lost Mortgaged Collateral Vessel and make each such Substitute Vessel subject to a Ship Mortgage pursuant to which the Collateral Agent shall obtain a Lien, executed on a first-priority basis (subject to Permitted Collateral Liens), on such Substitute Vessel for the benefit of itself, the Administrative Agent and delivered by Company, and the other Secured Parties; or (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment make an Event of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation Loss Offer in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgageterms hereof. (Vc) as A binding commitment to such other matters as Agent may reasonably request. Promptly upon the recording apply Event of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of Loss Proceeds from an Event of Loss in accordance with clause (other than insurance proceeds or other payments b)(1) above shall toll the application 365-day period in respect of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss Proceeds for a period not to an Airframe or Engine that has been or is being replaced by Company pursuant to exceed 365 days from the terms hereof, expiration of the aforementioned 365-day period so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, Proceeds are actually used within the later of 365 days from their receipt from such payments shall be applied to Event of Loss or 365 days from the prepayment date of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Companysuch binding commitment. (ivd) In (i) Any Event of Loss Proceeds that have not been previously applied or invested as provided in Section 4.02(b) will constitute “Excess Loss Proceeds”. Subject to Section 4.10, when the event aggregate amount of a requisition for use by Excess Loss Proceeds exceeds $50,000,000, the United States Government Term Borrowers shall, or shall cause the applicable Guarantor to, within 10 Business Days thereof, make an offer (an “Event of the Airframe or any EngineLoss Offer”), Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue solely to the same extent as if such requisition had not occurred. Any payments received by Agent Term Lenders, to repay or Company from purchase the United States Government for the use maximum principal amount of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to Term Loans in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.amount

Event of Loss. (i) If an Event of Loss shall occur with respect to an Airframe or an any Engine, the Company will promptly notify the Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 days after the receipt of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that the Company (and the Agent upon foreclosure of the Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, the Agent will execute and deliver to the Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "AirframeEngine" or an "Engine", as the case may be, for all purposes hereof and shall be deemed to constitute part of the AircraftSpare Engine Collateral. (ii) Whenever the Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), the Company will on or prior thereto: (A) deliver to the Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by the Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to the Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of the Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to the Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and the Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii4(f)(ii) have been complied with.; (D) furnish the Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as the Agent may reasonably request; (E) furnish the Agent with a warranty (as to title) bill ▇▇▇▇ of sale, in form and substance reasonably satisfactory to the Agent with respect to such Airframe or Engine; (F) furnish the Agent with such evidence of title such as the bill ▇▇▇▇ of sale as the Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to the Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by the Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to the Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and, (IV) that the Company (and the Agent upon succeeding to the Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage., and (V) as to such other matters as the Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, the Company will cause to be delivered to the Agent an opinion of counsel for the Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, Engine as between the Agent and the Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by the Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by the Company or the Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by the Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by the Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, the Company shall promptly notify the Agent of such requisition and all of the Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by the Agent or the Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, the Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which that is payable to or retained by the Company shall not be paid to the Company or retained by the Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to the Agent as security for the obligations of the Company under this Mortgage and the other Loan Documents, and, if the Agent shall declare the Credit Agreement to be in default, shall be applied against the Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to the Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as the Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of the Company under this Mortgage and the other Loan Documents.

Event of Loss. (i) If an Event of Loss shall occur with respect to an Airframe (or an Enginethe Airframe and any Engine then installed thereon), Company will promptly notify Administrative Agent thereof in writing (in any event within five (5) days of such occurrence) and will prepay, at the times and in the amounts required, the Additional Notes and remaining Secured Obligations in accordance with the terms of the Credit Agreement. (ii) If an Event of Loss shall occur with respect to an Engine when not installed on the Airframe or under other circumstances in which there has not occurred an Event of Loss with respect to the Aircraft, Company will promptly notify Administrative Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 sixty (60) days after the receipt occurrence of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (iiiv) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 below, another engine of the Bankruptcy Code with respect to same or another manufacturer of the replacement airframe same or engine referred to below, an Acceptable Alternate improved model and suitable for installation and use on the Airframe or Acceptable Alternate Engine and which shall be owned by Company free of all Liens (other than the lien of the First Mortgage and Permitted Encumbrances Encumbrances) and shall have a value and utility at least equal to (and be in as good operating condition as) such Engine immediately prior to such Event of Loss, assuming compliance by Company with all of the Lease)terms of this Mortgage with respect to such Engine. Upon compliance with the terms of the preceding sentence within such 18060-day period, Administrative Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine additional engine shall thereupon constitute an "AirframeEngine" or an "Engine", as the case may be, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (iiiii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (iii) above), Company will on or prior thereto: (A) deliver to Administrative Agent and duly file (immediately following the Supplemental Chattel Mortgage with respect to such Engine under the First Mortgage) for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Administrative Agent for filing (immediately after the financing statements with respect to such Engine to be filed in accordance with the First Mortgage) financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect protect the security interest of Administrative Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Administrative Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.: 202

Event of Loss. (i) If an Event of Loss shall occur with respect to an Airframe (or an Enginethe Airframe and any Engine then installed thereon), Company will promptly notify Administrative Agent thereof in writing (in any event within five (5) days of such occurrence) and will prepay, at the times and in the amounts required, the Notes and remaining Secured Obligations in accordance with the terms of the Credit Agreement. 164 (ii) If an Event of Loss shall occur with respect to an Engine when not installed on the Airframe or under other circumstances in which there has not occurred an Event of Loss with respect to the Aircraft, Company will promptly notify Administrative Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 sixty (60) days after the receipt occurrence of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (iiiv) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 below, another engine of the Bankruptcy Code with respect to same or another manufacturer of the replacement airframe same or engine referred to below, an Acceptable Alternate improved model and suitable for installation and use on the Airframe or Acceptable Alternate Engine and which shall be owned by Company free of all Liens (other than Permitted Encumbrances Encumbrances) and shall have a value and utility at least equal to (and be in as good operating condition as) such Engine immediately prior to such Event of Loss, assuming compliance by Company with all of the Lease)terms of this Mortgage with respect to such Engine. Upon compliance with the terms of the preceding sentence within such 18060-day period, Administrative Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine additional engine shall thereupon constitute an "AirframeEngine" or an "Engine", as the case may be, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.

Event of Loss. (i) If an Event of Loss shall occur with respect to an Airframe or an Engine, the Company will promptly notify the Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 days after the receipt of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that the Company (and the Agent upon foreclosure of the Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, the Agent will execute and deliver to the Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine", ," as the case may be, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever the Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), the Company will on or prior thereto: (A) deliver to the Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by the Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to the Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of the Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to the Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and the Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii4(f)(ii) have been complied with.; (D) furnish the Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as the Agent may reasonably request; (E) furnish the Agent with a warranty (as to title) bill ▇▇▇▇ of sale, in form and substance reasonably satisfactory to the Agent with respect to such Airframe or Engine; (F) furnish the Agent with such evidence of title such as the bill ▇▇▇▇ of sale as the Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to the Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by the Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to the Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and, (IV) that the Company (and the Agent upon succeeding to the Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage., and (V) as to such other matters as the Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, the Company will cause to be delivered to the Agent an opinion of counsel for the Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, Engine as between the Agent and the Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by the Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by the Company or the Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by the Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by the Company. (ivC) In the event of a requisition for use by the United States Government of the Airframe or any Engine, the Company shall promptly notify the Agent of such requisition and all of the Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by the Agent or the Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, the Company. (vD) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which that is payable to or retained by the Company shall not be paid to the Company or retained by the Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to the Agent as security for the obligations of the Company under this Mortgage and the other Loan Documents, and, if the Agent shall declare the Credit Agreement to be in default, shall be applied against the Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to the Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as the Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of the Company under this Mortgage and the other Loan Documents.

Event of Loss. (ia) If an Within 365 days after any Event of Loss shall occur with respect to an Airframe any Collateral with a fair market value (or an Enginereplacement cost, Company will promptly notify Agent thereof if greater) in writing (in any event within five (5) days excess of such occurrence) and will$1,000,000, not later than 180 days after the receipt of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe affected Issuer or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine"Restricted Subsidiary, as the case may be, for all purposes hereof and shall be deemed may apply the Net Loss Proceeds from such Event of Loss: (i) to constitute part of repay debt under the Aircraft.Credit Agreement or other First Lien Obligations that are Pari Passu Indebtedness; or (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest rebuilding, repair, replacement or construction of this Mortgage improvements to the asset or property affected by such Event of Loss (as contemplated by paragraph (i) abovethe “Subject Property”), Company will on or prior theretowith no concurrent obligation to make any purchase of any Second Lien Obligations; provided, however, that the Issuers deliver to the Trustee within 90 days of such Event of Loss: (A) deliver to Agent a written opinion from a reputable contractor that the Subject Property can be rebuilt, repaired, replaced or constructed in, and duly file for recording under operating in, substantially the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected same condition as it existed prior to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such within 18 months of the Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if an Officers’ Certificate certifying that the Issuers and/or their Restricted Subsidiaries, as applicable, have available from Net Loss Proceeds or other sources sufficient funds to complete the rebuilding, repair, replacement or construction described in clause (A) above. Any rebuilt, repaired, replaced, constructed or improved property will remain Collateral and remain subject to a perfected Second Priority Lien under the Collateral Documents, except as may otherwise by be provided in this Indenture and the Collateral Documents. Any Net Loss Proceeds from such payments Event of Loss will be segregated from the other assets of the Issuers or any of their Subsidiaries and will be held in a collateral account in accordance with the Collateral Documents pursuant to the Cash Collateral Control Agreement. Any Net Loss Proceeds that are received not applied in accordance with clauses (i) and/or (ii) above will be deemed “Excess Loss Proceeds.” (b) When the aggregate amount of Excess Loss Proceeds exceeds $15,000,000, the Issuers will make an offer (an “Event of Loss Offer”) to (i) first, all holders of Second Lien Obligations to purchase the maximum principal amount of Second Lien Obligations that may be purchased out of the Excess Loss Proceeds and, (ii) second, to the extent any amounts remain, all holders of Pari Passu Indebtedness that contain provisions similar to these set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of Asset Sales and/or Events of Loss. The offer price in any Event of Loss Offer will be equal to 100% of the principal amount plus accrued and unpaid interest, Liquidated Damages, if any, and any other amounts due, if any, on the Second Lien Obligations or Pari Passu Indebtedness, as the case may be, to the date of purchase, and will be payable in cash. Any Event of Loss Offer will be made substantially in accordance with the applicable procedures described in Section 3.09 of this Indenture. If any Excess Loss Proceeds remain after consummation of an Event of Loss Offer, the Issuers may use such Excess Loss Proceeds for any purpose not otherwise prohibited by this Indenture and the Collateral Documents. If the aggregate principal amount of Second Lien Obligations tendered pursuant to an Event of Loss Offer exceeds the Excess Loss Proceeds, the Trustee will select the Second Lien Obligations to be purchased on a pro rata basis based on the principal amount of Second Lien Obligations tendered. To the extent that any Excess Loss Proceeds remain after consummation of an Event of Loss Offer pursuant to this Section 4.18, the Issuers may use those Excess Loss Proceeds for any purpose not otherwise prohibited by this Indenture and the amount of Excess Loss Proceeds shall be reset to zero. (c) In the event of an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required any Collateral pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph clause (iii) of the definition of “Event of Loss” with respect to any property or assets that have a fair market value (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Companyreplacement cost, if greater) in excess of $2,000,000, the affected Issuer or Restricted Subsidiary, as the case may be, will be required to receive consideration at least equal to the time fair market value of such payment the property or retention any assets subject to the Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan DocumentsLoss.

Event of Loss. (i) If Except as otherwise set forth herein, during the Lease Term, Lessee shall bear the entire risk of loss of or damage to the Engine. Upon the occurrence of an Event of Loss shall occur with respect to an Airframe or an the Engine, Company will promptly notify Agent Lessee shall give Lessor prompt written notice thereof in writing (and shall, as soon as practical but in any event within five one hundred twenty (5120) days of such occurrence) and will, not later than 180 days after the receipt occurrence of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection at Lessee's option either (iiA) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue convey or cause to be entitled conveyed to Lessor, as replacement for the benefits of Section 1110 of the Bankruptcy Code with respect Engine, title to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate a Replacement Engine free and clear of all Liens (Liens, other than Permitted Encumbrances Liens, and having a value, utility, mod status at least equal to, and of the Lease). Upon compliance with same or improved model, service bulletin status, and maintenance status (i.e. total time, hours/cycles remaining until next inspection, overhaul or scheduled removal) and in at least as good operating condition as the preceding sentence within such 180-day periodEngine, Agent will execute assuming the Engine was of the value, utility and deliver to Company a partial release, remaining life and in recordable form, releasing the lien of this Mortgage condition and repair required by the terms hereof immediately prior to the extent that it covers such Airframe or Engine with respect to which occurrence of such Event of Loss has occurredLoss. Such Acceptable Alternate Airframe Prior to or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine"at the time of any such conveyance, as the case may beLessee, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph at its own expense, will promptly (i) above)furnish Lessor with a ▇▇▇▇ of sale, Company will on or prior thereto: (A) deliver in form and substance satisfactory to Agent and duly file for recording under the ActLessor, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Replacement Engine; (ii) cause a supplement hereto, in form and substance reasonably satisfactory to Lessor, subjecting such Replacement Engine to this Lease, to be duly executed by Lessee, and recorded pursuant to the Federal Aviation Act; (iii) furnish Lessor, with such evidence of title to such Replacement Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof 9 with respect to such Airframe or Replacement Engine as Agent Lessor may reasonably request; ; (Eiv) furnish Agent Lessor with an opinion of Lessee's counsel to the effect that title to such Replacement Engine has been duly conveyed to Lessor free and clear of all Liens, encumbrances and rights of others (except Permitted Liens) and is duly leased hereunder; (v) furnish Lessor with a warranty certificate signed by a duly authorized financial officer or executive of Lessee certifying that Lessee's representations and warranties set forth in Section 11 are true and accurate on and as of said date as though made on and as of said date and that upon consummation of such replacement, no Default or Event of Default will exist hereunder; (vi) furnish Lessor with such documents and evidence with respect to Lessee as Lessor may reasonably request in order to title) bill ▇▇ saleestablish the consummation of the transactions contemplated by this Section 8(a), the taking of all corporate proceedings in connection therewith and compliance with the conditions set forth in this Section 8(a), in each case in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; Lessor; (Fvii) furnish Agent Lessor with a certificate of a duly authorized officer of Lessee to the effect that no Event of Default has occurred and is continuing; and (viii) furnish Lessor with Uniform Commercial Code financing statements covering such evidence Replacement Engine, or (B) pay to Lessor in immediately available funds the Engine Loss Value, whereupon this Lease shall terminate, Lessee shall be relieved of title all further obligations hereunder except such as are expressly stated to survive the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest termination of this Mortgage stating that it has a value Lease and utility at least equal to, and Lessor shall return the Security Deposit to Lessee as provided in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming Section 3. Upon full compliance by Company Lessee with all the terms of this Mortgage with respect subparagraph (a), the Engine shall no longer be subject to such Airframe the terms of this Lease and Lessor will cause Lessor to transfer to Lessee title to the Engine, without recourse or Engine; and warranty (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) except that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Lessor Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage). (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.

Event of Loss. Section 5.01 (ia) If Event of Loss with Respect to the Aircraft. Upon ------------------------------------------ the occurrence of an Event of Loss shall occur with respect to an the Airframe or an Enginethe Airframe and the Engines and/or engines then installed thereon, Company will promptly notify Agent thereof in writing Owner shall (1) forthwith (and in any event event, within five (5) fifteen days of after such occurrence) give the Indenture Trustee written notice of such Event of Loss and will(2) within 60 days after such occurrence, not give the Indenture Trustee written notice of its election to perform one of the following options (it being understood that the failure to give such notice shall be deemed to be an election of the option set forth in clause (i) below): (i) Not later than 180 days the earlier of (x) the first Business Day next succeeding the 100th day following the occurrence of such Event of Loss or (y) the first [Trust Indenture and Mortgage ([_________])] Business Day that is at least three Business Days after receipt by the receipt loss payee of Proceeds the insurance proceeds with respect to such Event of Loss (but not earlier than the first Business Day next succeeding the 65th day following the occurrence of such Event of Loss) (the applicable day being the "Loss Payment Date"), Owner shall, to the extent not paid to the Indenture Trustee as insurance proceeds, pay or cause to be paid to the Indenture Trustee an amount sufficient to satisfy the Owner's obligations under Section 6.01(a)(i) and to redeem the Notes as provided in connection with Section 6.01(a)(ii); or (ii) Not later than the first Business Day next succeeding the 100th day following the occurrence of such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement Lessee shall substitute an aircraft or an airframe or engine referred to below, an Acceptable Alternate Airframe airframe and one or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine"more engines, as the case may be, for all purposes hereof in accordance with the terms hereof, provided that if (A) an Indenture Event of Default (other than as a direct result of such Event of Loss) shall have occurred and be continuing as of such election date or (B) Lessee shall be deemed have elected to constitute part of the Aircraft. make a substitution under this clause (ii) Whenever Company and shall subject fail for any Airframe or Engine reason to make such substitution in accordance with the lien and security interest terms hereof, then Lessee shall make the payments required by clause (i) above on such date. At such time as Lessor shall have received the sum of this Mortgage (as contemplated by paragraph the amounts specified in clause (i) above), Company will on or prior theretothe Indenture Trustee shall release from the Lien of this Agreement the Aircraft by executing and delivering to the Owner all documents and instruments as the Owner may reasonably request to evidence such release. The Owner's right to substitute a Replacement Airframe and Replacement Engines, if any, as provided in Section 5.01(a)(ii) shall be subject to the fulfillment, at the Owner's sole cost and expense, to conditions precedent: (Ai) deliver to Agent on the date when the Replacement Airframe and duly file for recording under the ActReplacement Engines, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be if any, is subjected to the lien and security interest Lien of this Mortgage; Agreement (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect being referred to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such 5.01 as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by "Replacement Closing Date"), the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has following documents shall have been duly authorized, executed and delivered by Companythe respective party or parties thereto and shall be in full force and effect, and an executed counterpart of each thereof (2or, in the case of the FAA ▇▇▇▇ of Sale and full warranty ▇▇▇▇ of sale referred to below, a photocopy thereof) creates a valid, perfected and first priority security interest in and shall have been delivered to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed,Indenture Trustee: (IIIA) that said Supplemental Chattel Mortgage has an Indenture Supplement covering the Replacement Airframe and Replacement Engines, if any, which shall have been duly filed for recordation pursuant to the Federal Aviation Act or such other applicable law of such jurisdiction other than the United States in which the Replacement Airframe and Replacement Engines, if any, are to be registered in accordance with Section 4.01(a)(3), as the provisions case may be; (B) an FAA ▇▇▇▇ of Sale (or a comparable document, if any, of another aviation authority, if applicable) covering the Replacement Airframe and [Trust Indenture and Mortgage ([_________])] Replacement Engines, if any, executed by the former owner thereof in favor of the Act Owner; (C) a full warranty (as to continue title) ▇▇▇▇ of sale, covering the perfection Replacement Airframe and Replacement Engines, if any, executed by the former owner thereof in favor of the Owner (or, at the Owner's option, other evidence of the Owner's ownership of such Replacement Airframe and Replacement Engines, if any, reasonably satisfactory to the Indenture Trustee); and (D) Uniform Commercial Code financing statements (or any similar statements or other documents required to be filed or delivered pursuant to the laws of the jurisdiction in which the Replacement Airframe and Replacement Engines, if any, may be registered in accordance with Section 4.01(a)(3)) as are deemed necessary or desirable by counsel for the Indenture Trustee to protect the security interests of the Indenture Trustee in the Replacement Airframe and Replacement Engines, if any; (ii) the Replacement Airframe shall be of the same or an improved make and model as the Airframe replaced and each Replacement Engine shall be an Acceptable Alternate Engine, and the Replacement Airframe and Replacement Engines, if any, have a value and utility (with respect to Engines, without regard to hours or cycles) at least equal to, and be in as good operating condition and repair as, the Airframe and any Engines replaced (assuming that such Airframe and Engines were in the condition required by the terms hereby) as evidenced by a certificate of an aircraft engineer (who may be an employee of the Owner) or an appraisal from an independent aircraft appraiser; (iii) the Indenture Trustee (acting directly or by authorization to its special counsel) shall have received satisfactory evidence as to the compliance with Section 4.03 with respect to the Replacement Airframe and Replacement Engines, if any; (iv) the Indenture Trustee at the expense of the Owner, shall have received (acting directly or by authorization to its special counsel) (A) an opinion of counsel to Owner (which may be Owner's General Counsel), addressed to the Indenture Trustee, to the effect that the Replacement Airframe and Replacement Engine, if any, has or have duly been made subject to the Lien of this Agreement, that all required action has been taken in order to maintain, and such action shall maintain, the effectiveness and priority (to the extent the same existed immediately prior to the occurrence of such Event of Loss, assuming the Owner was in compliance with all relevant terms hereof) of the security interest intended to be interests in the Airframe, the Engines and title thereto created by this Agreement and that the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled protections afforded to the benefits of Indenture Trustee by Section 1110 of the Bankruptcy Code with respect will not be less than such protections immediately prior to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording occurrence of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (assuming the Owner was in compliance with all relevant terms hereof) and (B) an opinion of qualified FAA counsel (or counsel in any jurisdiction outside the United States where the Aircraft may be registered in accordance with Section 4.01(a)(3)), [Trust Indenture and Mortgage ([_________])] addressed to the Indenture Trustee, as to, in the case of FAA counsel, the due recordation of the Indenture Supplement and all other than insurance proceeds documents or other payments instruments the application recordation of which is provided for in Section 4(g) below necessary to perfect and under protect the terms rights of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) Indenture Trustee in the Replacement Airframe and Replacement Engines, if any, or, in the case of counsel in another jurisdiction, the taking of all action necessary in such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, jurisdiction for such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligationspurposes; and (Bv) if such payments are the Indenture Trustee (acting directly or by authorization to special counsel) shall have received with respect to an Event officer's certificate of Loss with respect to which no replacement is being effectedOwner stating that, such payments shall be applied to in the prepayment opinion of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgagesigner, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition all conditions precedent provided for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f5.01(a) which is payable relating to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall replacement have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documentsbeen complied with.

Event of Loss. (i) If Upon the occurrence of an Event of Loss shall occur with respect to an Airframe or an EngineLoss, Company will promptly notify Agent thereof in writing (in any event within five (5) days of such occurrence) promptly, and will, not later than 180 days ten Business Days after the receipt Company knows of Proceeds in connection with such Event of Loss, mortgage hereundergive the Agent notice of such Event of Loss, by complying with all and within 95 days (or such longer period of time, up to 25 days, which is reasonably acceptable to the Agent) of the terms earlier of subsection (iia) below delivery to it of a Required Collateral Determination Certificate, which shall be delivered within ten Business Days after the Company knows of the occurrence of an Event of Loss and otherwise taking all (b) ten Business Days after the occurrence of such Event of Loss, to the extent necessary actions to provide that Company cause the Aggregate Collateral Value to equal or exceed the Required Collateral Amount (and or if the Collateral Value Effective Date has not occurred, the Minimum Required Collateral Amount), designate by a supplement to Schedule 9.18 hereof delivered to the Agent upon foreclosure of Company's interest in the Lease(which shall promptly send copies thereof to each 2012 Bank) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine a Replacement Aircraft that is owned by a Pledged SPE free and clear of all Liens (other than Permitted Encumbrances Collateral Liens) and accompanied by (i) Appraisal Reports from the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage Appraisers as to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine", as the case may be, for all purposes hereof and shall be deemed to constitute part Aircraft Value of the Replacement Aircraft. , and (ii) Whenever Company shall subject any Airframe a certificate from an Authorized Officer, demonstrating that (in the case of the foregoing clause (i)) or Engine certifying that (in the case of the foregoing clause (ii)) the Aggregate Collateral Value equals or exceeds the Required Collateral Amount (or the Minimum Required Collateral Amount if such replacement is effected prior to the lien and security interest of this Mortgage (as contemplated by paragraph (i) aboveCollateral Value Effective Date), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) . It is understood that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Unmatured Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in under this Section 4(f)(iii9.19 shall be deemed to have occurred unless the Loan Parties have failed to comply with such Section 9.19 and also failed to (x) have been complied with. (D) furnish Agent with evidence of compliance with make the insurance provisions of prepayment referenced in Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale13.8(a)(iii), in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account case of an Event of Loss occurring after the Collateral Value Effective Date or (other than insurance proceeds or other payments y) deliver the application of which is provided for Cash Collateral referenced in Section 4(g) below and under 13.8(a)(v), in the terms case of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant occurring prior to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by CompanyCollateral Value Effective Date. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.

Event of Loss. (ia) If an Event of Loss shall occur with respect to an Airframe or an Engine, Company Lessee will promptly notify Lessor and Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 days after the receipt occurrence of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue convey or cause to be entitled conveyed to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to belowLessor, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver Encumbrances) title to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such an Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine", as the case may be. Prior to or at the time of any such conveyance, for all purposes hereof and shall be deemed Lessee, at its own expense, will, as conditions to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph such transfer, (i) above), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent Lessor with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent Lessor, with respect to such Acceptable Alternate Airframe or Acceptable Alternate Engine; , (Fii) cause a Lease Supplement to be filed for recording pursuant to Title 49 of the United States Code, as amended, (iii) furnish Agent Lessor with such evidence of Lessee's title to such Acceptable Alternate Airframe or Acceptable Alternate Engine and of compliance with the insurance provisions of Section 14 hereof with respect to such Acceptable Alternate Airframe or Acceptable Alternate Engine as Lessor may reasonably request, (iv) furnish Lessor with an opinion of Lessee's counsel to the effect that title to such Acceptable Alternate Airframe or Acceptable Alternate Engine has been duly conveyed to Lessor free and clear of all Liens except Permitted Encumbrances and Lessor and Agent continue to have 1110 protection with respect to such Aircraft and (v) transfer to or at the direction of Lessee without recourse or warranty all of Lessor's right, title and interest, if any, in and to (A) the Airframe or Engine with respect to which such Event of Loss occurred and furnish to or at the direction of Lessee, at Lessee's expense, a bill ▇▇ sale as Agent may in form and substance reasonably request concerning satisfactory to Lessee, evidencing such Airframe transfer and (B) all claims, if any, against third parties, for damage to or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest loss of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior Loss, and such Airframe or Engine shall thereupon cease to be an Airframe or Engine leased hereunder. Lessee shall cooperate with Lessor and take all such actions as shall be requested by Lessor so that Lessor complies with Section 4(f) of the Aircraft Chattel Mortgage. For all purposes hereof, each such Acceptable Alternate Airframe or Acceptable Alternate Engine shall, after such conveyance, be deemed[C part of the property leased hereunder, and shall be deemed an "Airframe" or "Engine", as the case may be. No Event of Loss, assuming compliance Loss under the circumstance contemplated by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and paragraph (Ha) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described shall result in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest any reduction in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel MortgageBasic Rent. (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iiib) With respect to the Airframe or any Engine, as between the Agent Lessor and CompanyLessee, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement14 below) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company Lessee pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Lease Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (iia) above and until such time shall be held by Agent in accordance with the provisions hereof Lessor as security for the Secured Obligationsobligations of Lessee under the Lease; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, so much of such payments as shall not exceed (A) the Stipulated Loss Value as of the date of payment plus (B) all unpaid Supplemental Rent due through the date of payment, plus (C) all unpaid Basic Rent for the period ending on the date of payment shall be applied paid by Lessee to Lessor and following the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgageforegoing application, and the balance, if any, of such payments shall be paid over to or retained by Company.distributed between Lessee and Lessor as their respective interests may appear; (ivc) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company Lessee shall promptly notify Lessor and Agent of such requisition and all of CompanyLessee's obligations under this Mortgage the Lease shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent Lessor or Company Lessee from the United States Government for the use of the Airframe or such Engine, to the extent allocable to the Term, shall be paid over to, or retained by, CompanyLessee. (vd) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) 13 which is payable to or retained by Company Lessee shall not be paid to Company Lessee or retained by CompanyLessee, if at the time of such payment or retention any Event of Default or a Potential Lease Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent Lessor as security for the obligations of Company Lessee under this Mortgage the Lease and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against CompanyLessee's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Lease Event of Default, such amount shall be paid to Company Lessee to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.

Event of Loss. (i) If an Event of Loss shall occur with respect to an Airframe or an Engine, Company will promptly notify Agent thereof in writing (in any event within five (5) days of such occurrence) and will, not later than 180 days after the receipt of Proceeds in connection with such Event of Loss, mortgage hereunder, by complying with all of the terms of subsection (ii) below and otherwise taking all necessary actions to provide that Company (and the Agent upon foreclosure of Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the replacement airframe or engine referred to below, an Acceptable Alternate Airframe or Acceptable Alternate Engine free of all Liens (other than Permitted Encumbrances and the Lease). Upon compliance with the preceding sentence within such 180-day period, Agent will execute and deliver to Company a partial release, in recordable form, releasing the lien of this Mortgage to the extent that it covers such Airframe or Engine with respect to which such Event of Loss has occurred. Such Acceptable Alternate Airframe or Acceptable Alternate Engine shall thereupon constitute an "Airframe" or an "Engine", as the case may be, for all purposes hereof and shall be deemed to constitute part of the Aircraft. (ii) Whenever Company shall subject any Airframe or Engine to the lien and security interest of this Mortgage (as contemplated by paragraph (i) above), Company will on or prior thereto: (A) deliver to Agent and duly file for recording under the Act, a Supplemental Chattel Mortgage substantially in the -15- 16 form of Exhibit A hereto duly executed by Company appropriately describing such engine to be subjected to the lien and security interest of this Mortgage; (B) deliver to Agent for filing financing statements under Article 9 of the Uniform Commercial Code of the States of Colorado and New York (or such other States as may be required at such time) covering the security interest created by this Mortgage to perfect the security interest of Agent in the Airframe or Engine to be subjected to the lien and security interest of this Mortgage; (C) deliver to Agent an Officers' Certificate dated the date of execution of said Supplemental Chattel Mortgage, stating: (I) that the representations and warranties contained in Section 3 hereof are true and correct on and as of such date of execution with respect to such Airframe or Engine and Company; (II) that, upon consummation of the terms of this Section 4(f), no Potential Event of Default or Event of Default will exist; and (III) that all conditions precedent contemplated in this Section 4(f)(iii) have been complied with. (D) furnish Agent with evidence of compliance with the insurance provisions of Section 4(g) hereof with respect to such Airframe or Engine as Agent may reasonably request; (E) furnish Agent with a warranty (as to title) bill ▇▇ sale, in form and substance reasonably satisfactory to Agent with respect to such Airframe or Engine; (F) furnish Agent with such evidence of title such as the bill ▇▇ sale as Agent may reasonably request concerning such Airframe or Engine; (G) cause to be delivered to Agent an appraisal by the Approved Appraisers relating to the Airframe or Engine to be subjected to the lien and the security interest of this Mortgage stating that it has a value and utility at least equal to, and in as good operating condition as the Airframe or Engine subject to such Event of Loss immediately prior to such Event of Loss, assuming compliance by Company with all the terms of this Mortgage with respect to such Airframe or Engine; and (H) cause to be delivered to Agent an opinion or opinions of counsel dated the date of execution of such Supplemental Chattel Mortgage, stating: (I) that the Airframe or Engine specifically described in said Supplemental Chattel Mortgage, is free and clear of all recorded Liens, (II) that said Supplemental Chattel Mortgage (1) has been duly authorized, executed and delivered by Company, and (2) creates a valid, perfected and first priority security interest in and to the Airframe or Engine described in said Supplemental Chattel Mortgage, enforceable against all third parties and securing the payment of all obligations purported to be secured thereby and that all action required to perfect fully such security interest has been taken and completed, (III) that said Supplemental Chattel Mortgage has been duly filed for recordation in accordance with the provisions of the Act to continue the perfection and priority of the security interest intended to be created by the Mortgage, and, (IV) that Company (and the Agent upon succeeding to Company's interest in the Lease) will continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the lease of the Airframe or Engine described in said Supplemental Chattel Mortgage., and (V) as to such other matters as Agent may reasonably request. Promptly upon the recording of each Supplemental Chattel Mortgage under the Act, Company will cause to be delivered to Agent an opinion of counsel for Company as to the due recording of such Supplemental Chattel Mortgage in accordance with the Act. (iii) With respect to the Airframe or any Engine, as between the Agent and Company, any payments on account of an Event of Loss (other than insurance proceeds or other payments the application of which is provided for in Section 4(g) below and under the terms of the Credit Agreement) received from any government authority or other person shall be applied as follows: (A) if such payments are received with respect to an Event of Loss to an Airframe or Engine that has been or is being replaced by Company pursuant to the terms hereof, so long as there shall exist no Event of Default or Potential Event of Default, such payment shall be paid over to or retained by Company or Lessee upon satisfaction of the conditions for replacement contained in paragraph (ii) above and until such time shall be held by Agent in accordance with the provisions hereof as security for the Secured Obligations; and (B) if such payments are received with respect to an Event of Loss with respect to which no replacement is being effected, such payments shall be applied to the prepayment of the Notes required pursuant to the terms of the Credit Agreement and shall be held pursuant to the terms of this Mortgage, and the balance, if any, shall be paid over to or retained by Company. (iv) In the event of a requisition for use by the United States Government of the Airframe or any Engine, Company shall promptly notify Agent of such requisition and all of Company's obligations under this Mortgage shall continue to the same extent as if such requisition had not occurred. Any payments received by Agent or Company from the United States Government for the use of the Airframe or such Engine, shall be paid over to, or retained by, Company. (v) Any amount referred to in paragraph (iii) or (iv) of this Section 4(f) which is payable to or retained by Company shall not be paid to Company or retained by Company, if at the time of such payment or retention any Event of Default or a Potential Event of Default shall have occurred and be continuing, but shall be held by or paid over to Agent as security for the obligations of Company under this Mortgage and the other Loan Documents, and, if Agent shall declare the Credit Agreement to be in default, shall be applied against Company's obligations hereunder and thereunder as and when due. At such time as there shall not be continuing any such Event of Default or Potential Event of Default, such amount shall be paid to Company to the extent not previously applied in accordance with the preceding sentence. In addition, and whether or not there shall exist an Event of Default or Potential Event of Default, until such time as Company shall request to be paid any amount referred to in paragraph (iii) or (iv) in order to effect the mortgaging hereunder of a replacement Airframe or Engine, any amounts referred to in paragraphs (iii) or (iv) of this Section 4(f) shall be held by the Agent as security for the obligations of Company under this Mortgage and the other Loan Documents.