EFTA01329275.pdf

Cr014762 Conveyance Recorded Aug/19/2021 10:20 Docusign Envelope ID: C9C428F67BCA-4106-A210-423F148011314 DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION FAA AIRCRAFT REGISTRY P.O. Boa 25504 Oklahoma City, Oklahoma 73125 AIRCRAFT SECURITY AGREEMENT NAME & ADDRESS OF BORROWER: N550GP, LLC 2151 E. Convention Center Way, Suite 222 Ontario, CA 91764 NAME & ADDRESS OF SECURED PARTY/LENDER: Bank of Hope 3200 Wilshire Blvd. 7th Floor Los Angeles, CA 90010 NAME & ADDRESS OF GRANTOR: N550GP, LLC 2151 E. Convention Center Way, Suite 222 ABOVE SPACE Ontario, CA 91764 FOR FAA USE ONLY 1. THIS AIRCRAFT SECURITY AGREEMENT dated May 11, 2021, is made and executed by N550GP, LLC, a California limited liability company ("Grantor"), in favor of Bank of Hope ("Lender"). 2. GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a continuing security interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which lender may have by law. 3. COLLATERAL. The word "Collateral" as used in this Agreement means the following described Airframe, Engines, and Contracts, as defined herein: 1518211451 SDNY_GM_02757490 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00244412 EFTA01329275  All3 VIN0HV1M0 9h :I lid hi Oil WA 88 N0IlnISID38 IdV8081V VV3 HIIM 031ii SDNY_GM_02757491 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00244413 EFTA01329276 DomhutnEmetope 10. C9C428F8-713CA-4108-A29F423F14101014 AIRCRAFT SERIAL FAA REGISTRATION YEAR MFG MANUFACTURER MODEL NUMBER NUMBER NUMBER 2008 Gulfstream GV-SP (aka 5173 N2I2JE (Pending Aerospace Gulfstream GV-SP change to NSS0GP) Corporation (aka (O550) on the GULFSTREAM on International the International Registry drop down Registry drop down menu) menu) ENGINE MODEL NUMBER(S) SERIAL NUMBER(S) MAKE Rolls-Royce BR700-710C4-1I (aka 15449 Deutschland BR7I0 on the Ltd & Co KG International (aka ROLLS Registry drop down ROYCE on the menu) International Registry drop down menu) Rolls-Royce BR700-710C4-11 (aka 15448 Deutschland BR710 on the Ltd & Co KG International (aka ROLLS Registry drop down ROYCE on the menu) International Registry drop down menu) AUXILIARY MODEL NUMBER SERIAL NUMBER POWER UNIT MAKE HONEYWELL RE220 P-500 The word "Aircraft" also means and includes without limitation, (a) the Airframe, (b) the Engines, (c) any propellers, and (d) related log books, manuals, diagrams and records. The word "Airframe" means the Aircraft's airframe, together with any and all parts, appliances, components, instruments, accessories, accessions, attachments, equipment, or avionics (including, without limitation, radio, radar, navigation systems, or other electronic equipment) installed in, appurtenant to, or delivered with or in respect of such airframe. The word "Engines" means any engines described above together with any other aircraft engines which either now or in the future arc installed on, appurtenant to, or delivered with or in respect of the Airframe, together with any and all pans, appliances, components, accessories, accessions, attachments or equipment installed on, appurtenant to, or delivered with or in respect of such engines. The word "Engines" shall also refer to any replacement aircraft engine which, under this Agreement, is required or permitted to be installed upon the Airframe. 2 ISIS21345 4 SDNY_GM_02757492 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00244414 EFTA01329277  SDNY_GM_02757493 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244415 EFTA01329278  DocuSogn Erm)loge ID C9C4213F1178CA-41O8-A29F-423F 148O1O1/ The word "Contracts" means any and all agreements, contracts, service contracts, repair contracts, maintenance contracts, including the Engine Maintenance Program, insurance contracts, leases, purchase agreements, bills of sale and assignments, and any other instruments, contracts, or agreements of any kind with respect to the Collateral. 4. DURATION. This Agreement, including any representations, warranties and covenants contained herein, shall remain continuing, in full force and effect until such time as the Indebtedness secured hereby, including principal, interest, costs, expenses, attorneys' fees and other fees and charges, shall have been paid in full, together with all additional sums that Lender may pay or advance on Grantor's behalf and interest thereon as provided in this Agreement. 5. REPRESENTATIONS, WARRANTIES. AND COVENANTS. Grantor represents, warrants and covenants to Lender at all times while this Agreement is in effect as follows: 5.1 Title. Grantor warrants that Grantor is the lawful owner of the Collateral and holds good and marketable title to the Collateral, free and clear of all Encumbrances except the lien of this Agreement. Grantor is, or concurrent with the completion of the transactions contemplated by this Agreement will be, the registered owner of the Aircraft pursuant to a proper registration under the Transportation Code, and Grantor qualifies in all respects as a citizen of the United States as defined in the Transportation Code. If Grantor acquired its interest in the Aircraft on or after the effective date of the Convention, the ownership rights of Grantor shall be the subject of a valid and subsisting registered contract of sale at the International Registry. Grantor shall defend Lender's rights in the Collateral against the claims and demands of all other persons. The Collateral is not and will not be registered under the laws of any foreign country, and Grantor is and will remain a citizen of the United States as defined in the Transportation Code. 5.2 Authority; Binding Effect, etc. Grantor is a limited liability company which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of California. Grantor is duly authorized to transact business in all other states in which Grantor is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Grantor is doing business. Grantor has the full right, power and authority to enter into the Note, the Related Documents, and this Agreement and to grant a security interest in the Collateral to Lender. The Note, the Related Documents, and this Agreement are binding upon Grantor as well as Grantor's successors and assigns, and are legal, valid and binding obligations of Grantor and are legally enforceable in accordance with their terms. Grantor's principal place of business is 2151 IL Convention Center Way, Suite 222, Ontario. CA 91764, and unless Grantor has designated otherwise in writing, the Grantor's principal place of business is the office at which Grantor keeps its complete logs, manuals, books and records including its complete logs, manuals, books and records concerning the Collateral. Grantor's exact legal name is: N550GP. LL..C. 3 !ill,: 045 3 SDNY_GM_02757494 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00244416 EFTA01329279  SDNY_GM_02757495 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244417 EFTA01329280  DoouSpn EnvelOpe CPC42UF 84EICA-4108-AZ9F-423F 14001014 Grantor has not used any trade, assumed or previous names within the past five years. Grantor has not merged with or into, or transferred all or substantially all of its assets to, any other entity within the past five years. Grantor was situated in the United States, State of California at the time of the conclusion of this Agreement. Grantor has the power to dispose of the Aircraft, as contemplated in the Convention. 6. Authorization. Grantor's execution, delivery, and performance of the Note, this Agreement and all the Related Documents have been duly authorized by all necessary action by Grantor and do not conflict with, result in a violation of, or constitute a default under (I) any provision of Grantor's articles of organization or membership agreements, or bylaws or articles of incorporation, or any agreement or other instrument binding upon Grantor or (2) any law, governmental regulation, court decree, or order applicable to Grantor or to Grantor's properties. 7. Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Grantor is pending or threatened, and no other event has occurred which may materially adversely affect Grantor's financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing. 8. Taxes. All of Grantor's tax returns and reports that arc or were required to be filed, have been filed, and all taxes, assessments and other governmental charges in connection with the Aircraft and the Collateral have been paid in full, except those presently being or to be contested by Grantor in good faith in the ordinary course of business and for which adequate reserves have been provided. 9. Information. All information heretofore or contemporaneously herewith furnished by Grantor to Lender for the purposes of or in connection with this Agreement or any transaction contemplated hereby (including without limitation the description of the Aircraft) is, and all information hereafter furnished by or on behalf of Grantor to Lender will be, true and accurate in every material respect on the date as of which such information is dated or certified; and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading. 10. Aircraft and Log Books. Grantor will keep accurate and complete logs, manuals, books, and records relating to the Collateral, and will provide Lender with copies of such reports and information relating to the Collateral as Lender may reasonably require from time to time. 11. Airframe and Engines. The Airframe is type certified to transport at least eight persons including crew, or goods in excess of 2750 kilograms and each of the Engines has at least 1750 pounds of thrust or at least 550 rated take off shaft horsepower. 12. Perfection of Security Interest. The security interest granted herein constitutes a valid and subsisting International Interest in the Aircraft under the Convention. Grantor grants and covenants to continue a first priority perfected security interest (including an International Interest) in and to the Collateral in favor of Lender. Grantor agrees to prepare and file financing 4 ril451 SDNY_GM_02757496 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_0024441 EFTA01329281  SDNY_GM_02757497 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244419 EFTA01329282  Don Sian Envelope t. C9C4313F8270CA410S-A29F-423Fi4801M 4 statements and to take whatever other actions arc requested by Lender to perfect and continue Lender's security interests in the Collateral. Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Grantor will note Lender's interest upon any and all chattel paper if not delivered to Lender for possession by Lender. In particular, Grantor will perform, or will cause to be performed, upon Lender's request, each and all of the following: (I) record, register and file this Agreement (and the IDF,RA, as defined below), together with such notices, financing statements or other documents or instruments as Lender may request from time to time to carry out fully the intent of this Agreement. with the FAA in Oklahoma City, Oklahoma, United States of America and other governmental agencies. either concurrent with the delivery and acceptance of the Collateral or promptly after the execution and delivery of this Agreement; (2) take all actions necessary to initiate or consent to the registration of an International Interest in the Aircraft (or at Lender's option, a Prospective International Interest) with the International Registry; (3) take all actions necessary to initiate or consent to the registration of any other interests or rights pertaining to the Collateral with the International Registry, as requested in the sole discretion of Lender; (4) furnish to Lender evidence of every such recording, registering, and filing; and (5) execute and deliver or perform any and all acts and things which may be reasonably requested by Lender with respect to complying with or remaining subject to the Geneva Convention, the Convention, the International Registry, the laws and regulations of the FAA, the laws of the United States and the laws and regulation of any of the various states or countries in which the Collateral is or may fly over, operate in, or become located in. Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the sole purposes of preparing, executing, and/or filing any documents necessary to perfect, amend or to continue the security interests granted in this Agreement or to demand termination of filings of other secured parties. Lender may at any time, and without further authorization from Grantor, file a carbon, photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security interest in the Collateral. 13. Convention Requirements. Prior to funding by Lender, (a) Grantor shall establish a valid and existing account with the International Registry, appoint an Administrator and/or a Professional User acceptable to Lender to initiate or consent to registrations at the International Registry with regard to the Collateral, and initiate the registration of an International Interest (or, at Lender's option, a Prospective International Interest) in the Collateral, with all such steps being completed except for the consent of Lender, (b) Grantor's initiation of such registration at the International Registry shall not have expired or lapsed; (c) Grantor shall execute and Lender shall have received a fully completed and originally executed Irrevocable De-Registration and Export Request Authorization ("IDERA"), in the form attached hereto as Exhibit A and acceptable to the FAA and Lender, (d) Grantor shall execute and Lender shall have received a fully completed and originally executed Irrevocable Power of Attorney In Fact (Aircraft Registration), in the form attached hereto as Exhibit B and acceptable to the FAA and Lender, and (e) Grantor's Contract of Sale shall be registered and searchable in the International Registry. 14. Performance of Contracts. Grantor hereby undertakes to perform all of its obligations under the Note, this Agreement, any Related Documents and any Contracts and to 5 I S:I H£1 SDNY_GM_02757498 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244420 EFTA01329283  SDNY_GM_02757499 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244421 EFTA01329284  DonaSign Envelope ID. C9C42DF/348CA-1108442*-423F14801014 procure the performance of third parties (other than Lender) under the Related Documents and any Contracts. 15. Notices to Lender. Grantor will promptly notify lender in writing at Lender's address shown above (or such other addresses as Lender may designate from time to time) prior to any (I) change in Grantor's name; (2) change in Grantor's assumed business name(s); (3) (if Grantor is a business) change in the ownership of the Grantor or management of the Grantor; (4) change in the authorized signer(s); (5) change in Grantor's principal office address; (6) change in Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity; (8) merger of Grantor with or into, transfer by Grantor of all or substantially all of its assets to, or acquisition by Grantor of all or substantially all of the assets of, any other entity; or (9) change in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name or state of organization will take effect until after Lender has received notice. 16. Location of the Collateral. Grantor will hangar or keep the Collateral at its home airport or base location (the "Home Airport"), which is: Chino Airport (CNO) 17. Maintenance, Use, Repairs, Inspections, and Licenses. Grantor, at its expense, shall do, or cause to be done, in a timely manner with respect to the Collateral each and all of the following: 17.1 Grantor shall maintain and keep the Collateral in as good condition and repair as it is on the date of this Agreement, ordinary wear and tear excepted. 17.2 Grantor shall maintain and keep the Aircraft in good order and repair and in airworthy condition in accordance with the requirements of the FAA and each of the manufacturers' manuals and mandatory service bulletins and each of the manufacturers' non-mandatory service bulletins which relate to airworthiness, and as recommended or required by any rules, regulations, or guidelines of the FAA and/or the manufacturer. 173 Grantor shall replace in or on the Airframe, any and all Engines, parts, appliances, instruments or accessories which may be worn out, lost, destroyed or otherwise rendered unfit for use. 17.4 Grantor shall cause to be performed, on all parts of the Aircraft, all applicable mandatory airworthiness directives, Federal Aviation Regulations, special Federal Aviation Regulations, and manufacturers' service bulletins relating to airworthiness, the compliance date of which shall occur while this Agreement is in effect. 17.5 Grantor shall be responsible for all required inspections of the Aircraft and licensing or re-licensing of the Aircraft in accordance with all applicable FAA and other governmental requirements. Grantor shall at all times cause the Aircraft to 6 15321345 SDNY_GM_02 757500 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244422 EFTA01329285  SDNY_GM_02 757501 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244423 EFTA01329286 DocuSegn Emelope ID. C9C4213F8-78CA-4108429F-423, 14801014 have on board and in a conspicuous location a current Certificate of Airworthiness issued by the FAA. 17.6 All inspections, maintenance, modifications, repairs, and overhauls of the Aircraft (including those performed on the Airframe, the Engines or any components. appliances, accessories, instruments, or equipment) shall be performed by personnel authorized by the FAA to perform such services. 17.7 If any Engine, component, appliance, accessory, instrument, equipment or pan of the Aircraft shall reach such a condition as to require overhaul, repair or replacement, for any cause whatever, in order to comply with the standards for maintenance and other provisions set forth in this Agreement, Grantor may: (a) Install on or in the Aircraft such items of substantially the same type in temporary replacement of thosc then installed on the Aircraft, pending overhaul or repair of the unsatisfactory item; provided, however, that such replacement items must be in such a condition as to be permissible for use upon the Aircraft in accordance with the standards for maintenance and other provisions set forth in this Agreement; provided further, however, that Grantor at all times must retain unencumbered title to any and all items temporarily removed; or (b) Install on or in the Aircraft such items of substantially the same type and value in permanent replacement of those then installed on the Aircraft; provided, however, that such replacement items must be in such condition as to be permissible for use upon the Aircraft in accordance with the standards for maintenance and other provisions set forth in this Agreement; provided further, however, that in the event Grantor shall be required or permitted to install upon the Airframe or any Engine, components, appliances, accessories, instruments, engines, equipment or parts in permanent replacement of those then installed on the Airframe or such Engine, Grantor may do so provided that, in addition to any other requirements of this Agreement: (i) Lender is not divested of its security interest in and lien upon any item removed from the Aircraft and that no such removed item shall be or become subject to the lien or claim of any person, unless and until such item is replaced by an item of the type and condition required by this Agreement. title to which, upon its being installed or attached to the Airframe, is validly vested in Grantor, free and clear of all liens and claims, of every kind or nature, of all persons other than Lender, (ii) Grantor's title to every substituted item shall immediately be and become subject to the security interests and liens of Lender and each of the provisions of this Agreement, and each such item shall remain so encumbered and so subject unless it is, in turn, replaced by a substitute item in the manner permitted in this Agreement; (iii) If an item is removed from the Aircraft and replaced in accordance with the requirements of this Agreement, and if the substituted item satisfies the requirements of this Agreement, including the terms and conditions above, then the item which is removed shall thereupon be free and clear of the security interests and liens of Lender; and IS1121)45 SDNY_GM_02 757502 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 002 24 EFTA01329287  SDNY_GM_02757503 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244425 EFTA01329288  00CuDnin Envelope ID. C9C428F8-7111C.A-4106a29F-423F141501DI4 ( ) Such items arc approved in writing by Lender in its sole discretion. 17.8 In the event that any Engine, component. appliance, accessory, instrument. equipment or part is installed upon the Airframe, and is not in substitution for or in replacement of an existing item, such additional item shall be considered as an accession to the Airframe. 17.9 If the Engines are enrolled in or become enrolled in an "Engine Maintenance Program" at the time of loan application or anytime thereafter, Grantor represents, warrants, and covenants that the Engines will continue to be enrolled in such Engine Maintenance Program while this Agreement is in effect and until all amounts owed to Lender are paid in full. "Engine Maintenance Program" means the engine maintenance program provided by or similar to, but not limited to, any of the following: AlliedSignal's MSP, Allison's Power by the Hour, CFE Corp's CSP, Jet Support Services Inc.'s JSSI, Pratt & Whitney's ESP, Williams/Rolls' PBH, Rolls Royce CorporatcCare, and EMS. 17.10 If the auxiliary power unit ("APU') is enrolled in or becomes enrolled in a long- term maintenance program at the time of loan application or anytime thereafter, Grantor represents, warrants, and covenants that the API./ will continue to be enrolled in such maintenance program while this Agreement is in effect and until all amounts owed to Lender arc paid in full. 17.11 Grantor shall maintain all records, logs, and materials relating to the Aircraft required by. and in accordance with, the FAA and its rules and regulations, regardless of upon whom such requirements are, by their terms, normally imposed. 17.12 The Aircraft shall be operated at all times by a currently certified pilot having the minimum total pilot hours and pilot-in-command hours required by FAA rules or regulations and applicable insurance policies. 17.13 Grantor shall use, operate, maintain, and store the Aircraft, and every part thereof, carefully and in compliance with all applicable statutes, ordinances, and regulations of all jurisdictions in which the Aircraft is used, and with all applicable insurance policies, manufacturer's recommendations and operating and maintenance manuals, including, without limitation, FAR 9I, 121, or 135, as applicable, and all applicable maintenance, service, repair and overhaul manuals and service bulletins published by manufacturers of the Aircraft or of the accessories, equipment and parts installed in the Aircraft. 18. Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral, its use or operation, upon this Agreement, upon the Note, or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized 8 1516213/5 SDNY_GM_02757504 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244426 EFTA01329289  SDNY_GM_02757505 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244427 EFTA01329290  DocuSqn Envelope ID C9C429F6-78CA-4106-A29F-423F14601014 in Lender's sole opinion. If the Collateral is subjected to a lien which is not discharged within thirty (30) days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. 19. Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances and regulations of the FAA and all other governmental authorities applicable to the use, operation, maintenance, overhauling or condition of the Collateral. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Lender's interest in the Collateral, in Lender's opinion, is not jeopardized. 20. Maintenance of Insurance. Grantor shall procure and maintain at all times all risks insurance on the Collateral, including without limitation, ground, taxiing and in flight coverage, loss, damage, destruction, fire, theft, liability and hull insurance, and such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor shall further provide and maintain, at its sole cost and expense, comprehensive public liability insurance, naming both Grantor and Lender as parties insured, protecting against claims for bodily injury, death and/or property damage arising out of the use, ownership, possession, operation and condition of the Aircraft, and further containing a broad form contractual liability endorsement covering Grantor's obligations to indemnify Lender as provided under this Agreement. Lender's other requirements for insurance as of the date of this Agreement, subject to modification at Lender's reasonable discretion, include the following: (I) the Borrower must be the named insured; (2) the policy must provide coverage to the engines while removed from the Airframe; (3) unless otherwise consented to by Lender in writing, the liability insurance policy must provide a minimum of $30 million liability coverage; (4) the all risks policy must be for the greater of (a) the amount of the Indebtedness or (b) the full insurable value of the Aircraft, and the basis must be the replacement value of the Aircraft; (5) the policy must contain a Breach of Warranty Endorsement up to 90% of the policy; (6) coverage must be maintained, in full force and effect, for the duration of the Note; (7) Bank of Hope (or its assignee) must be named as lienholder and Loss Payee; (8) the policy must not prohibit the loss payee from making insurance payments upon Grantor's failure to make payments or upon Borrower's default; (9) the policy must include territorial limits; (10) the policy must include coverage for possible seizure and/or impoundment, and/or war risk perils; (II) if the aircraft is to be operated by a charter operator or is party to a lease agreement with a charter operator, and Lender has consented to such use, the policy must include coverage for charter operation and for sparc parts (engines); and (12) the policy must provide for notification of the loss payees upon termination of coverage. Such policies of insurance must also contain a provision, in form and substance acceptable to Lender, prohibiting cancellation or the alteration of such insurance without at least thirty (30) days' prior written notice to Lender of such intended cancellation or alteration. Such insurance policies also shall include an endorsement providing that coverage in favor of lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Grantor agrees to provide Lender with originals or certified copies of such 9 'S1821115; SDNY_GM_02757506 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244428 EFTA01329291  SDNY_GM_02757507 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244429 EFTA01329292  W044) Envelope ID C9C428F8-7BCA-4108-A29F-423F14801014 policies of insurance. Grantor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Indebtedness, Grantor will provide Lender with such lender's loss payable or other endorsements as Lender may require. Grantor shall not use or permit the Collateral to be used in any manncr or for any purpose excepted from or contrary to the requirements of any insurance policy or policies required to be carried and maintained under this Agreement or for any purpose excepted or exempted from or contrary to the insurance policies, nor shall Grantor do any other act or permit anything to be done which could reasonably be expected to invalidate or limit any such insurance policy or policies. 21. Failure to Provide Insurance. Grantor acknowledges and agrees that if Grantor fails to provide any required insurance or fails to continue such insurance in force, Lender may do so at Grantor's expense. The cost of any such insurance, at the option of Lender, shall be added to the Indebtedness. Grantor acknowledges that if Lender so purchases any such insurance, the insurance will provide limited protection against physical damage to the Collateral, up to an amount equal to the unpaid balance of the debt. Grantor's equity in the Collateral may not be insured. In addition, the insurance may not provide any public liability or property damage indemnification and may not meet the requirements of any financial responsibility laws. 22. Application of Insurance Proceeds. Grantor shall promptly (not to exceed seven (7) days) notify Lender of any loss or damage to the Collateral in excess of 550,000, whether or not such casualty or loss is covered by insurance. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Lender shall have the right to receive directly the proceeds of any insurance payable to Grantor on the Collateral; and the insurance proceeds shall be paid directly to Lender. If Lender consents to repair or replacement of the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, tender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness. 23. Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance showing such information as Lender may reasonably request including, but not limited to, the following: (I) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining that value; and (6) the expiration date of the policy. In addition, Grantor shall upon request by Lender (however not more often than annually) have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral. 24. Notice of Encumbrances and Events of Default. Grantor shall immediately notify Lender in writing upon the filing of any attachment, lien, judicial process, or claim relating to the Collateral. Grantor additionally agrees to immediately notify Lender in writing 10 ISIS:0453 SDNY_GM_02757508 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA_00244430 EFTA01329293  SDNY_GM_02 757509 SUBJECT TO PROTECTIVE ORDER PARAGRAPHS 7, 8, 9, 10, 15, and 17 EFTA 00244431 EFTA01329294  DocuSien Ernelope ID. C9C42Bre-TECA4106429F-423F14801D14 upon the occurrence of any Event of Default, or event that with the passage of time, failure to cure, or giving of notice, may result in an Event of Default under any of Grantor's obligations that may be secured by any presently existing or future Encumbrance, or that may result in an Encumbrance affecting the Collateral, or should the Collateral be seized or attached or levied upon, or threatened by seizure or attachment or levy, by any person other than Lender. 25. Notices of Claims and Litigation. Grantor will promptly inform Lender in writing of (1) all material adverse changes in Grantor's financial condition, (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting or concerning in any manner the Collateral, and (3) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting or concerning in any manner the Grantor or any Guarantor which could materially affect the financial condition of Grantor or the financial condition of any Guarantor. 26. Inspection. Grantor shall permit employees or agents of Lender: (I) to inspect, at Lender's cost, the Aircraft, Engines and APU once per year and thereafter as reasonably requested by Lender; (2) to inspect all other Collateral (including the logs, books, manuals and records comprising or related to the Collateral) for the Indebtedness, at any reasonable time, and (3) to examine or audit Grantor's books, financial statements, accounts, and records and to make copies and memoranda of Grantor's books, financial statements, accounts, and rec