INDEMNIFICATION AND INSURANCE

5.1 Indemnification A. An Airline shall indemnify, save, hold harmless, and defend the Authority, its officials, agents and employees, and its successors and assigns, individually and collectively, from and against any claim, action, loss, damage, injury, liability, and cost and expense of whatsoever kind or nature (including, but not limited to, reasonable attorneys' fees, disbursements, court costs, and expert fees) due to or caused by injury to persons, including death, or damage to property arising out of, resulting from, or incident to such Airline's use and occupancy of any Regional Airport pursuant to the Terms and Conditions or otherwise, except to the extent such injury or damage is due to or caused by the gross negligence or willful misconduct of the Authority, its officers, employees, agents, successors, or assigns. Upon demand from the Authority and within ten (10) business days, an Airline shall acknowledge and confirm in writing its obligation to indemnify the Authority in accordance with the provisions of this Section 5.1. {A0081207.2} B. The provisions of this Section 5.1 shall survive the termination of the Airline's operations at any Regional Airport. C. Any final judgment, after any applicable appeal process, rendered against an Airline by a court of competent jurisdiction for any cause for which the Airline is liable shall be conclusive against the Airline as to liability and amount upon the expiration of the time for appeal therefrom. 5.2 Insurance A. Without limiting an Airline's obligation to indemnify the Authority, as provided for in Section 5.1, the Airline shall procure and maintain in force at all times during the Airline's operations at any Regional Airport, a customary policy or policies of insurance insuring the Airline against the liabilities outlined below, subject to policy terms and conditions, for injuries to persons (including wrongful death) and damages to property caused by the Airline's use and occupancy of the Airport or otherwise caused by the Airline's activities and operations at such Regional Airport, the policy limits thereof to be in the minimum limits as set forth herein. 1. Comprehensive Airline Liability Insurance. An Airline shall maintain comprehensive airline liability insurance as follows: a. The comprehensive airline liability insurance and, if necessary, commercial umbrella insurance, shall be in a minimum limit of not less than twice the minimum limit of aircraft liability insurance as determined pursuant to Section 5.2 A. 2 below for each occurrence and in the aggregate. b. The comprehensive airline liability insurance shall include, with aggregates where applicable, but not be limited to, coverage for Commercial/Comprehensive General Liability, Bodily Injury and Property Damage to Third Parties, Passenger Liability, Personal Injury and Advertising Injury Liability, Contractual Liability, Passengers' Checked and Unchecked Baggage Liability, Premises, Operations, Independent Contractors, Products-Completed Operations Liabilities, and Cargo Legal Liabilities. Explosion, Collapse and Underground Property Damage Liability Coverage shall not be excluded. Airlines operating only cargo aircraft are not required to carry Passenger Liability and Passengers' Checked and Unchecked Baggage Liability coverage. c. The comprehensive airline liability insurance shall include coverage for mobile or other ground vehicle equipment operated on those parts of each Regional Airport that are not accessible to the public and are designated as restricted areas. Mobile or other ground vehicle equipment shall include, but not be limited to, baggage tugs, aircraft pushback tugs, provisioning trucks, air stair trucks, belt loaders, and any automobiles. d. The comprehensive airline liability insurance shall apply as primary insurance with respect to any other insurance afforded to the Authority. There shall be no endorsement or modification of the policy to make it excess over other available insurance. If the policy states that it is excess or prorate, the policy shall be endorsed to be primary with respect to the Authority as an additional insured. {A0081207.2} 2. Aircraft Liability Insurance. An Airline shall maintain aircraft liability insurance with a limit of not less than that specified in the table below, with aggregates where applicable, for bodily injury or death, personal injury, and property damage for all owned, operated, maintained, non-owned, leased, or hired aircraft, including passenger coverage. Certificated Air Carriers are defined as carriers having more than 60 passenger seats or having a maximum payload capacity of more than 18,000 pounds. Carriers with fewer passenger seats or less maximum payload capacity are either Certificated Commuter Air Carriers or Part 298 Air Taxis, depending on their DOT certification. The aircraft liability insurance may be included in the comprehensive airline liability insurance policy. Minimum Limit (each occurrence) Carrier Type Passenger Cargo Certificated Air Carriers $100,000,000 $20,000,000 Certificated Commuter Air Carriers 25,000,000 2,000,000 Part 298 Air Taxis 5,000,000 400,000 3. Commercial Automobile Liability Insurance a. An Airline shall maintain automobile liability insurance with a limit of not less than five million dollars ($5,000,000) for each accident for vehicles operated in restricted areas at each Regional Airport where Airline operates. b. An Airline shall maintain automobile liability insurance with a limit of not less than one million dollars ($1,000,000) for each accident for vehicles operated in areas at each Regional Airport other than restricted areas where Airline operates. c. Such insurance shall cover liability arising out of any automobile owned or operated by the Airline or its employees during the course of their employment at each Regional Airport where it operates. 4. Workers' Compensation Liability Insurance. An Airline shall maintain workers' compensation insurance. Coverage shall be at statutory limits as required by the laws of the Commonwealth of Puerto Rico. 5. Commercial Property Insurance. An Airline shall maintain all-risk property insurance covering the full value and full replacement cost of the Airline's property, improvements and betterments at each Regional Airport where it operates. B. The aforesaid required amounts and types of insurance shall be reviewed from time to time by the Authority and may be adjusted by the Authority if the Authority reasonably determines such adjustments are necessary to protect the Authority's interests. The required minimum limits of coverage may be reduced by the Authority, upon a showing satisfactory to the Authority, in its sole discretion, that it is impractical for an Airline to procure any of the aforesaid limits of coverage. In no event, however, shall the minimum limits of coverage applicable to an Airline, be less than the minimum limits of coverage that such Airline is required to carry and maintain under the rules and regulations of the U.S. Department of {A0081207.2} Transportation applicable to such Airline. An Airline shall furnish the Authority, prior to the commencement of such Airline's operations at a Regional Airport, with a certificate or certificates of insurance as evidence that the required insurance is in force for its operations at such Regional Airport. The Authority reserves the right to inspect, and Airline agrees to offer for inspection by Authority, for good cause, a certified, complete copy of each insurance policy, including endorsements and riders, required by Section 5.2.A of the Terms and Conditions. The Authority shall be named as an additional insured on each such liability insurance policy or policies to the extent of Airline's obligations assumed under this Section 5.2, subject to policy terms, conditions, limitations, warranties and exclusions. Said policies shall be issued by insurance companies of nationally recognized financial responsibility with a Best's Guide rating of no less than A-(VII) or of internationally recognized and favorable reputation in the aviation marketplace and shall be approved by the Authority, such approval not to be unreasonably withheld. Said policies shall be in a form and content reasonably satisfactory to the Authority and shall provide for thirty (30) days advance written notice to the Authority prior to the cancellation of or any adverse material change in such policies. In no event shall any insurance referred to herein be cancelled by the Airline without the prior written consent of the Authority. An Airline's failure to provide or maintain the required insurance coverage as set forth herein shall be grounds for immediate termination of the Airline's operations at any Regional Airport, at the Authority's option. C. No Representation of Coverage Adequacy. By requiring insurance in accordance with the Terms and Conditions, the Authority does not represent that coverage and limits will necessarily be adequate to protect an Airline and such coverage and limits shall not be deemed as a limitation on any Airline's liability or its obligation to indemnify to the Authority under the Terms and Conditions. D. Commercial Umbrella Liability Insurance. As indicated above, an Airline may use commercial umbrella liability insurance so that Airline has the flexibility to select the best combination of primary and excess limits to meet the total insurance limits required herein, provided that the coverage provided under the umbrella policy meet the requirements for the primary policies as set forth herein. E. Incidents. In addition to any applicable requirements contained in the Airport Rules and Regulations or imposed by the laws of the Commonwealth of Puerto Rico or of the United States, an Airline shall, within reasonable time, notify the Authority of any accident or event which occurs at any Regional Airport as a result of or in connection with the Airline's performance hereunder, which results in or might reasonably be expected to have resulted in bodily injury, personal injury or property damage (an "Incident"). Additionally, an Airline shall send a written report of any Incident to the Authority within twenty four (24) hours or as soon as possible, but no more than four (4) business days after such Airline has notice of the Incident. Initial notification of Incidents and written reports shall be sent separately to both the Airport Manager and the Chief of Contract, Insurance and Claims Office, P.O. Box 362829, San Juan, P.R. 00936-2829. 5.3 Waiver of Subrogation The Authority and an Airline shall each be required to waive any and all rights of recovery against the other party arising out of damage or destruction of the buildings, any Regional (A0081207.2) Airport, or any other property from causes included under any property insurance policies to the extent such damage or destruction is covered by the proceeds of such policies and whether or not such damage or destruction shall have been caused by the parties, their officers, employees or agents, but only to the extent that the insurance policies then in force permit such waiver. All policies of property insurance shall contain, to the extent available, this waiver of subrogation provision and the cost of such provision shall be borne by the primary insured.