Confidential treatment has been requested for portions of this document.  This
copy of the document filed as an Exhibit omits the confidential information
subject to the confidentiality request.  Omissions are designated by the symbol
[…***…].  A complete version of this document has been filed separately with the
Securities and Exchange Commission.
 
Exhibit 10.2

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GUARANTEE AND COLLATERAL AGREEMENT
 
dated as of
 
March 10, 2011,
 
among
 
ALLEGIANT TRAVEL COMPANY,
 
THE SUBSIDIARIES OF ALLEGIANT TRAVEL COMPANY IDENTIFIED HEREIN
 
and
 
THE BANK OF NEW YORK MELLON,
 
as Collateral Agent
 
 
 
 

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TABLE OF CONTENTS
 
ARTICLE I
     
Definitions
SECTION 1.01.
Credit Agreement
1
SECTION 1.02.
Other Defined Terms
1
ARTICLE II
     
Guarantee
SECTION 2.01.
Guarantee
5
SECTION 2.02.
Guarantee of Payment
6
SECTION 2.03.
No Limitations
6
SECTION 2.04.
Reinstatement
7
SECTION 2.05.
Agreement To Pay; Subrogation
7
SECTION 2.06.
Information
7
ARTICLE III
     
Pledge of Securities
SECTION 3.01.
Pledge
7
SECTION 3.02.
Delivery of the Pledged Collateral
8
SECTION 3.03.
Representations, Warranties and Covenants
8
SECTION 3.04.
Certification of Limited Liability Company and Limited Partnership Interests
9
SECTION 3.05.
Registration in Nominee Name; Denominations
10
SECTION 3.06.
Voting Rights; Dividends and Interest
10
ARTICLE IV
     
Security Interests in Personal Property
SECTION 4.01.
Security Interest
12
SECTION 4.02.
Representations and Warranties
14
SECTION 4.03.
Covenants
16
SECTION 4.04.
Reserved
21
SECTION 4.05.
Covenants Regarding Patent, Trademark and Copyright Collateral
21
SECTION 4.06.
Covenants Regarding Aircraft Collateral
22

 
 
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ARTICLE V
     
Remedies
SECTION 5.01.
Remedies Upon Default
23
SECTION 5.02.
Application of Proceeds
24
SECTION 5.03.
Grant of License to Use Intellectual Property
25
SECTION 5.04.
Securities Act
25
SECTION 5.05.
Registration
26
ARTICLE VI
     
Indemnity, Subrogation and Subordination
SECTION 6.01.
Indemnity and Subrogation
27
SECTION 6.02.
Contribution and Subrogation
27
SECTION 6.03.
Subordination
27
ARTICLE VII
     
Miscellaneous
SECTION 7.01.
Notices
28
SECTION 7.02.
Waivers; Amendment
28
SECTION 7.03.
Collateral Agent’s Fees and Expenses; Indemnification
28
SECTION 7.04.
Successors and Assigns
29
SECTION 7.05.
Survival of Agreement
30
SECTION 7.06.
Counterparts; Effectiveness; Several Agreement
30
SECTION 7.07.
Severability
30
SECTION 7.08.
Right of Set-Off
30
SECTION 7.09.
Governing Law; Jurisdiction; Consent to Service of Process
31
SECTION 7.10.
WAIVER OF JURY TRIAL
31
SECTION 7.11.
Headings
31
SECTION 7.12.
Security Interest Absolute
32
SECTION 7.13.
Termination or Release
32
SECTION 7.14.
Additional Subsidiaries
33
SECTION 7.15.
Collateral Agent Appointed Attorney-in-Fact
33
SECTION 7.16.
Liability of the Collateral Agent
34

 
 
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Schedules
 
 
Schedule I
Subsidiary Guarantors
Schedule II
Pledged Stock; Debt Securities
Schedule III
Intellectual Property
   
Exhibits
 
 
Exhibit I
Form of Supplement
Exhibit II
Form of Intellectual Property Security Agreement
Exhibit III
Form of Aircraft Security Agreement
Exhibit IV
Form of Perfection Certificate
Exhibit V
Form of Acknowledgement, Consent and Control Agreement

 
 
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GUARANTEE AND COLLATERAL AGREEMENT (this “Agreement”) dated as of March 10,
2011, among ALLEGIANT TRAVEL COMPANY, a Nevada corporation (the “Borrower”), the
Subsidiaries of ALLEGIANT TRAVEL COMPANY identified herein and THE BANK OF NEW
YORK MELLON (“BNYM”), as collateral agent (in such capacity, the “Collateral
Agent”).
 
Reference is made to the Credit Agreement dated as of March 10, 2011 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, the Lenders party thereto, Citadel Securities
Trading LLC, as Administrative Agent and BNYM, as Collateral Agent.  The Lenders
have agreed to extend credit to the Borrower subject to the terms and conditions
set forth in the Credit Agreement.  The obligations of the Lenders to extend
such credit are conditioned upon, among other things, the execution and delivery
of this Agreement.  The Subsidiary Guarantors are affiliates of the Borrower,
will derive substantial benefits from the extension of credit to the Borrower
pursuant to the Credit Agreement and are willing to execute and deliver this
Agreement in order to induce the Lenders to extend such credit.  Accordingly,
the parties hereto agree as follows:
 
 
ARTICLE I
 
Definitions
 
SECTION 1.01.                                Credit Agreement.  (a) Capitalized
terms used in this Agreement and not otherwise defined herein have the meanings
specified in the Credit Agreement.  All terms defined in the New York UCC (as
defined herein) and not defined in this Agreement have the meanings specified
therein; the term “instrument” shall have the meaning specified in Article 9 of
the New York UCC.
 
(b)           The rules of construction specified in Section 1.02 of the Credit
Agreement also apply to this Agreement.
 
SECTION 1.02.                                Other Defined Terms.  As used in
this Agreement, the following terms have the meanings specified below:
 
“Account Debtor” means any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.
 
“Aircraft” has the meaning given to such term in the Aircraft Security
Agreement.
 
“Aircraft Collateral” has the meaning set forth in the Aircraft Security
Agreement.
 
 “Aircraft Security Agreement” has the meaning assigned to such term in
Section 4.02(d).
 
“Airframe” has the meaning given to such term in the Aircraft Security
Agreement.
 
 “Article 9 Collateral” has the meaning assigned to such term in Section 4.01.
 
 
 

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“Collateral” means Article 9 Collateral and Pledged Collateral.
 
“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter owned
by any Grantor or that such Grantor otherwise has the right to license, or
granting any right to any Grantor under any copyright now or hereafter owned by
any third party, and all rights of such Grantor under any such agreement.
 
“Copyrights” means all of the following now owned or hereafter acquired by any
Grantor:  (a) all copyright rights in any work subject to the copyright laws of
the United States or any other country, whether as author, assignee, transferee
or otherwise, whether or not the underlying works of authorship have been
published; all works of authorship and other intellectual property rights
therein; all copyrights of works based on, incorporated in, derived from or
relating to works covered by such copyrights; all right, title and interest to
make and exploit all derivative works based on or adopted from works covered by
such copyrights, (b) all registrations, applications for registration and
renewals of any such copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office, including
those material copyrights listed on Schedule III, (c) the rights to print,
publish and distribute any of the foregoing, (d) the right to sue or otherwise
recover for any and all past, present and future infringements thereof and
(e) all other rights of any kind whatsoever of such Grantor accruing thereunder
or pertaining thereto.
 
“Credit Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.
 
“Engines” has the meaning given to such term in the Aircraft Security Agreement.
 
“Excluded Collateral” has the meaning given to such term in the Aircraft
Security Agreement.
 
“Federal Securities Laws” has the meaning assigned to such term in Section 5.04.
 
“General Intangibles” means all choses in action and causes of action and all
other intangible personal property of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Grantor, including corporate or
other business records, indemnification claims, contract rights (including
rights under leases (other than leases constituting Aircraft Collateral),
Hedging Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts.
 
“Grantors” means the Borrower and the Subsidiary Guarantors.
 
“Guarantors” means the Subsidiary Guarantors.
 
“Intellectual Property” means (a) all intellectual and similar property of every
kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing, (b) all
other rights of any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto and (c) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations thereof.
 
 
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“Intellectual Property Security Agreement” has the meaning assigned to such term
in Section 4.02(c).
 
“License” means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement to which any Grantor is a party, including
those material licenses listed on Schedule III.
 
“Loan Document Obligations” means (a) the due and punctual payment by the
Borrower of (i) the principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary
obligations of the Borrower to any of the Secured Parties under the Credit
Agreement and each of the other Loan Documents, including obligations to pay
fees, expense reimbursement obligations and indemnification obligations, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other
obligations of the Borrower under or pursuant to the Credit Agreement and each
of the other Loan Documents, (c) the due and punctual payment and performance of
all the obligations of each other Loan Party under or pursuant to this Agreement
and each of the other Loan Documents, (d) in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations, or liabilities of
the Borrower referred to in clauses (a), (b) and (c) above, after an Event of
Default shall have occurred and be continuing, the reasonable expenses of
retaking, holding, preparing for sale or leave, selling or otherwise disposing
of or realizing on the Collateral, or of any exercise by the Collateral Agent of
its rights hereunder, together with reasonable attorneys’ fees, expenses and
court costs, and (e) any and all sums advanced by the Collateral Agent in order
to preserve the Collateral or preserve its security interest in the Collateral.
 
“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.
 
“Non-Owned Equipment” has the meaning given to such term in the Aircraft
Security Agreement.
 
“Obligations” means (a) Loan Document Obligations and (b) the due and punctual
payment and performance of all obligations of each Loan Party under each Hedging
Agreement that (i) (x) is in effect on the Closing Date with a counterparty that
is a Lender, the Administrative Agent, the Collateral Agent or any of their
respective Affiliates as of the Closing Date or (y) is entered into after the
Closing Date with any counterparty that is a Lender, the Administrative Agent,
the Collateral Agent or any of their respective Affiliates at the time such
Hedging Agreement is entered into and (ii) are agreements entered into to hedge
against fluctuations in interest rates or currency incurred in the ordinary
course of business and consistent with prudent business practice; provided that
in each case such agreements or arrangements shall not have been entered into
for speculation purposes.
 
 
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“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
 
“Patents” means all of the following now owned or hereafter acquired by any
Grantor:  (a) all letters patent of the United States or the equivalent thereof
in any other country, all recordings thereof, and all applications for letters
patent of the United States or the equivalent thereof in any other country,
including recordings and pending applications in the United States Patent and
Trademark Office or any similar offices in any other country, including those
material patents listed on Schedule III, (b) the right to sue or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (c) all reissues, continuations, divisions,
continuations-in-part, renewals, substitutes, improvements thereon or extensions
thereof, and the inventions disclosed or claimed therein, including the right to
make, have made, use, import, sell and/or offer to sell the inventions disclosed
or claimed therein and (d) all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto.
 
“Perfection Certificate” means a certificate substantially in the form of
Exhibit IV to this Agreement, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by each Grantor.
 
“Permitted Encumbrance” means Liens of the type described in Section 6.02 of the
Credit Agreement.
 
“Pledged Collateral” has the meaning assigned to such term in Section 3.01.
 
“Pledged Debt Securities” has the meaning assigned to such term in Section 3.01.
 
“Pledged Securities” means any promissory notes, stock certificates or other
securities now or hereafter included in the Pledged Collateral, including all
certificates, instruments or other documents representing or evidencing any
Pledged Collateral.
 
“Pledged Stock” has the meaning assigned to such term in Section 3.01.
 
“Proceeds” has the meaning specified in Section 9-102 of the New York UCC.
 
“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) the
Collateral Agent, (d) each counterparty to any Hedging Agreement with a Loan
Party the obligations under which constitute Obligations, (e) the beneficiaries
of each indemnification obligation undertaken by any Loan Party under any Loan
Document and (f) the successors and assigns of each of the foregoing.
 
 
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“Security Interest” has the meaning assigned to such term in Section 4.01.
 
“Spare Part” has the meaning given to such term in the Aircraft Security
Agreement.
 
“Spare Part Locations” has the meaning given such term in the Aircraft Security
Agreement.
 
“Subsidiary Guarantors” means (a) the Subsidiaries identified on Schedule I and
(b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary
Guarantor after the Closing Date.
 
“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by any Grantor or that any Grantor otherwise has the right to license, or
granting to any Grantor any right to use any trademark now or hereafter owned by
any third party, and all rights of any Grantor under any such agreement.
 
“Trademarks” means all of the following now owned or hereafter acquired by any
Grantor:  (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, domain names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those material trademarks listed on Schedule III, (b) the right to sue
or otherwise recover for any and all past, present and future infringements,
dilutions and misappropriations thereof, (c) all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto, (d) in
each case above, all goodwill associated therewith or symbolized thereby and
(e) all other assets, rights and interests that uniquely reflect or embody such
goodwill.
 
 
ARTICLE II
 
Guarantee
 
SECTION 2.01.                                Guarantee.  Each Guarantor
unconditionally guarantees, jointly with the other Guarantors and severally, as
a primary obligor and not merely as a surety, the due and punctual payment and
performance of the Obligations.  Each of the Guarantors further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation.  Each of the
Guarantors waives presentment to, demand of payment from and protest to the
Borrower or any other Loan Party of any of the Obligations, and also waives
notice of acceptance of its guarantee and notice of protest for nonpayment.
 
 
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SECTION 2.02.                                Guarantee of Payment.  Each of the
Guarantors further agrees that its guarantee hereunder constitutes a guarantee
of payment when due and not of collection, and waives any right to require that
any resort be had by the Administrative Agent or any other Secured Party to any
security held for the payment of the Obligations or to any balance of any
deposit account or credit on the books of the Administrative Agent or any other
Secured Party in favor of the Borrower or any other Person.
 
SECTION 2.03.                                No Limitations.  (a) Except for
termination of a Guarantor’s obligations hereunder as expressly provided in
Section 7.13, the obligations of each Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense or set-off, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise.  Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by (i) the failure of the
Administrative Agent or any other Secured Party to assert any claim or demand or
to enforce any right or remedy under the provisions of any Loan Document or
otherwise; (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, any Loan Document or any other
agreement, including with respect to any other Guarantor under this Agreement;
(iii) the release of any security held by the Collateral Agent or any other
Secured Party for the Obligations or any of them; (iv) any default, failure or
delay, willful or otherwise, in the performance of the Obligations; or (v) any
other act or omission that may or might in any manner or to any extent vary the
risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a
matter of law or equity (other than the indefeasible payment in full in cash of
all the Obligations).  Each Guarantor expressly authorizes the Secured Parties
to take and hold security for the payment and performance of the Obligations, to
exchange, waive or release any or all such security (with or without
consideration), to enforce or apply such security and direct the order and
manner of any sale thereof in their sole discretion or to release or substitute
any one or more other guarantors or obligors upon or in respect of the
Obligations, all without affecting the obligations of any Guarantor hereunder.
 
(b)           To the fullest extent permitted by applicable law, each Guarantor
waives any defense based on or arising out of any defense of the Borrower or any
other Loan Party or the unenforceability of the Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
or any other Loan Party, other than the indefeasible payment in full in cash of
all the Obligations.  The Administrative Agent and the other Secured Parties
may, at their election, foreclose on any security held by one or more of them by
one or more judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with the Borrower or any other Loan
Party or exercise any other right or remedy available to them against the
Borrower or any other Loan Party, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Obligations have
been fully and indefeasibly paid in full in cash.  To the fullest extent
permitted by applicable law, each Guarantor waives any defense arising out of
any such election even though such election operates, pursuant to applicable
law, to impair or to extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against the Borrower or any other Loan
Party, as the case may be, or any security.
 
 
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SECTION 2.04.                                Reinstatement.  Each of the
Guarantors agrees that its guarantee hereunder shall continue to be effective or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any Obligation is rescinded or must otherwise be restored by the Collateral
Agent or any other Secured Party upon the bankruptcy or reorganization of the
Borrower, any other Loan Party or otherwise.
 
SECTION 2.05.                                Agreement To Pay; Subrogation.  In
furtherance of the foregoing and not in limitation of any other right that the
Administrative Agent or any other Secured Party has at law or in equity against
any Guarantor by virtue hereof, upon the failure of the Borrower or any other
Loan Party to pay any Obligation when and as the same shall become due, whether
at maturity, by acceleration, after notice of prepayment or otherwise, each
Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the
Administrative Agent for distribution to the applicable Secured Parties in cash
the amount of such unpaid Obligation.  Upon payment by any Guarantor of any sums
to the Administrative Agent as provided above, all rights of such Guarantor
against the Borrower or any other Loan Party arising as a result thereof by way
of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subject to Article VI.
 
SECTION 2.06.                                Information.  Each Guarantor
assumes all responsibility for being and keeping itself informed of the
Borrower’s and each other Loan Party’s financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Obligations
and the nature, scope and extent of the risks that such Guarantor assumes and
incurs hereunder, and agrees that none of the Administrative Agent or the other
Secured Parties will have any duty to advise such Guarantor of information known
to it or any of them regarding such circumstances or risks.
 
 
ARTICLE III
 
Pledge of Securities
 
SECTION 3.01.                                Pledge.  As security for the
payment or performance, as the case may be, in full of the Obligations, each
Grantor hereby assigns and pledges to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, a security interest in, all of such Grantor’s right, title and interest
in, to and under (a) the shares of capital stock and other Equity Interests
owned by it and listed on Schedule II and any other Equity Interests obtained in
the future by such Grantor and the certificates representing all such Equity
Interests (the “Pledged Stock”); provided that the Pledged Stock shall not
include (i) more than 65% of the issued and outstanding voting Equity Interests
of any Foreign Subsidiary or (ii) the Equity Interests in SFB Fueling, LLC or
[…***…]; (b) (i) the debt securities listed opposite the name of such Grantor on
Schedule II, (ii) any debt securities in the future issued to such Grantor and
(iii) the promissory notes and any other instruments evidencing such debt
securities (the “Pledged Debt Securities”); (c) all other property that may be
delivered to and held by the Collateral Agent pursuant to the terms of this
Section 3.01; (d) subject to Section 3.06, all payments of principal or
interest, dividends, cash, Instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in exchange for or
upon the conversion of, and all other Proceeds received in respect of, the
securities referred to in clauses (a) and (b) above; (e) subject to
Section 3.06, all rights and privileges of such Grantor with respect to the
securities and other property referred to in clauses (a), (b), (c) and
(d) above; and (f) all Proceeds of any of the foregoing (the items referred to
in clauses (a) through (f) above being collectively referred to as the “Pledged
Collateral”).
 
 
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TO HAVE AND TO HOLD the Pledged Collateral, together with all right,
title  interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent, its successors and assigns, for the benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
 
SECTION 3.02.                                Delivery of the Pledged
Collateral.  (a) Each Grantor agrees promptly to deliver or cause to be
delivered to the Collateral Agent any and all Pledged Securities.
 
(b)           Each Grantor will cause any Indebtedness for borrowed money owed
to such Grantor by any other Grantor to be evidenced by a duly executed
Intercompany Note.
 
(c)           Upon delivery to the Collateral Agent, (i) any certificated
Pledged Securities shall be accompanied by stock powers duly executed in blank
or other instruments of transfer satisfactory to the Collateral Agent and by
such other instruments and documents as the Collateral Agent may reasonably
request, (ii) all other property comprising part of the Pledged Collateral shall
be accompanied by proper instruments of assignment duly executed by the
applicable Grantor and such other instruments or documents as the Collateral
Agent may reasonably request and (iii) all uncertificated Pledged Securities
shall be accompanied by a control agreement in the form of Exhibit V.  Each
delivery of Pledged Securities shall be accompanied by a schedule describing the
securities, which schedule shall be attached hereto as Schedule II and made a
part hereof; provided that failure to attach any such schedule hereto shall not
affect the validity of such pledge of such Pledged Securities.  Each schedule so
delivered shall supplement any prior schedules so delivered.
 
SECTION 3.03.                                Representations, Warranties and
Covenants.  The Grantors jointly and severally represent, warrant and covenant
to and with the Collateral Agent, for the benefit of the Secured Parties, that:
 
(a)           Schedule II correctly sets forth the percentage of the issued and
outstanding units of each class of the Equity Interests of the issuer thereof
represented by the Pledged Stock and includes all Equity Interest debt
securities and promissory notes required to be pledged hereunder;
 
(b)           the Pledged Stock and Pledged Debt Securities have been duly and
validly authorized and issued by the issuers thereof and (i) in the case of
Pledged Stock, are fully paid and nonassessable and (ii) in the case of Pledged
Debt Securities, are, to Grantors’ knowledge, legal, valid and binding
obligations of the issuers thereof;
 
 
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(c)           except for the security interests granted hereunder, each of the
Grantors (i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner, beneficially and of record, of
the Pledged Securities indicated on Schedule II as owned by such Grantor,
(ii) holds the same free and clear of all Liens, other than Liens created by
this Agreement and Permitted Encumbrances and transfers made in compliance with
the Credit Agreement, (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or permit to exist any security interest in or other Lien
on, the Pledged Collateral, other than Liens created by this Agreement,
Permitted Encumbrances and transfers made in compliance with the Credit
Agreement, and (iv) will defend its title or interest thereto or therein against
any and all Liens (other than the Lien created by this Agreement and Permitted
Encumbrances), however arising, of all Persons whomsoever;
 
(d)           except for restrictions and limitations imposed by the Loan
Documents or securities laws generally, the Pledged Collateral is and will
continue to be freely transferable and assignable, and none of the Pledged
Collateral is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any nature that might prohibit, impair, delay or otherwise affect the pledge
of such Pledged Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Collateral Agent of rights and remedies hereunder;
 
(e)           each of the Grantors has the power and authority to pledge the
Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated;
 
(f)           no consent or approval of any Governmental Authority, any
securities exchange or any other Person was or is necessary to the validity of
the pledge effected hereby (other than such as have been obtained and are in
full force and effect);
 
(g)           by virtue of the execution and delivery by the Grantors of this
Agreement, when any Pledged Securities are delivered to the Collateral Agent in
accordance with this Agreement, the Collateral Agent will obtain a legal, valid
and perfected first priority lien upon and security interest in such Pledged
Securities as security for the payment and performance of the Obligations; and
 
(h)           the pledge effected hereby is effective to vest in the Collateral
Agent, for the benefit of the Secured Parties, the rights of the Collateral
Agent in the Pledged Collateral as set forth herein.
 
SECTION 3.04.                                Certification of Limited Liability
Company and Limited Partnership Interests.  Each interest in any limited
liability company or limited partnership controlled by any Grantor and pledged
hereunder shall either (x) be represented by a certificate, shall be a
“security” within the meaning of Article 8 of the New York UCC and shall be
governed by Article 8 of the New York UCC, or (y) with respect to uncertificated
interests, be made subject to a control agreement in a form of Exhibit V to this
Agreement.
 
 
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SECTION 3.05.                                Registration in Nominee Name;
Denominations.  Prior to the occurrence and continuance of an Event of Default
the Pledged Securities shall be held in the name of the applicable Grantor,
endorsed or assigned in blank or in favor of the Collateral Agent.  Following
the occurrence and continuance of an Event of Default and the acceleration of
the Loans, the Collateral Agent, on behalf of the Secured Parties, shall have
the right (in its sole and absolute discretion) to hold the Pledged Securities
in its own name as pledgee or the name of its nominee (as pledgee or as
sub-agent).  Each Grantor will promptly give to the Collateral Agent copies of
any notices or other communications received by it with respect to Pledged
Securities registered in the name of such Grantor.  The Collateral Agent shall
at all times have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose
consistent with this Agreement.
 
SECTION 3.06.                                Voting Rights; Dividends and
Interest.  (a) Unless and until an Event of Default shall have occurred and be
continuing and the Collateral Agent (acting at the written direction of the
Required Lenders) shall have notified the Grantors that their rights under this
Section 3.06 are being suspended:
 
(i)           Each Grantor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms of this
Agreement, the Credit Agreement and the other Loan Documents; provided that such
rights and powers shall not be exercised in any manner that could materially and
adversely affect the rights inuring to a holder of any Pledged Securities or the
rights and remedies of any of the Collateral Agent or the other Secured Parties
under this Agreement or the Credit Agreement or any other Loan Document or the
ability of the Secured Parties to exercise the same.
 
(ii)           The Collateral Agent shall execute and deliver to each Grantor,
or cause to be executed and delivered to such Grantor, all such proxies, powers
of attorney and other instruments as such Grantor may reasonably request (and in
form and substance reasonably satisfactory to the Collateral Agent) for the
purpose of enabling such Grantor to exercise the voting and/or consensual rights
and powers it is entitled to exercise pursuant to subparagraph (i) above.
 
(iii)           Each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Securities to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable laws; provided
that any noncash dividends, interest, principal or other distributions that
would constitute Pledged Stock or Pledged Debt Securities, whether resulting
from a subdivision, combination or reclassification of the outstanding Equity
Interests of the issuer of any Pledged Securities or received in exchange for
Pledged Securities or any part thereof, or in redemption thereof, or as a result
of any merger, consolidation, acquisition or other exchange of assets to which
such issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall not be commingled by such
Grantor with any of its other funds or property but shall be held separate and
apart therefrom, shall be held in trust for the benefit of the Collateral Agent
and shall be forthwith delivered to the Collateral Agent in the same form as so
received (with any necessary endorsement).
 
 
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(b)           Upon the occurrence and during the continuance of an Event of
Default, after the Collateral Agent shall have notified the Grantors of the
suspension of their rights under this Section 3.06, then all rights of any
Grantor to dividends, interest, principal or other distributions that such
Grantor is authorized to receive pursuant to paragraph (a)(iii) of this
Section 3.06 shall cease, and all such rights shall thereupon become vested in
the Collateral Agent, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal or other
distributions.  All dividends, interest, principal or other distributions
received by any Grantor contrary to the provisions of this Section 3.06 shall be
held in trust for the benefit of the Collateral Agent, shall be segregated from
other property or funds of such Grantor and shall be forthwith delivered to the
Collateral Agent in the same form as so received (with any necessary
endorsement).  Any and all money and other property paid over to or received by
the Collateral Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02.  After all Events of
Default have been cured or waived and the Borrower has delivered to the
Collateral Agent a certificate to that effect, the Collateral Agent shall
promptly repay to each Grantor (without interest) all dividends, interest,
principal or other distributions that such Grantor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and
that remain in such account.
 
(c)           Upon the occurrence and during the continuance of an Event of
Default, after the Collateral Agent shall have notified the Grantors of the
suspension of their rights under  this Section 3.06, then all rights of any
Grantor to exercise the voting and consensual rights and powers it is entitled
to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the
obligations of the Collateral Agent under paragraph (a)(ii) of this
Section 3.06, shall cease, and all such rights shall thereupon become vested in
the Collateral Agent (acting at the written direction of the Required Lenders),
which shall have the sole and exclusive right and authority to exercise such
voting and consensual rights and powers; provided that, upon receipt of a
written direction from the Required Lenders, the Collateral Agent shall permit
the Grantors to exercise such rights following and during the continuance of an
Event of Default.
 
(d)           Any notice given by the Collateral Agent to the Grantors
suspending their rights under paragraph (a) of this Section 3.06 (i) may be
given by telephone if promptly confirmed in writing, (ii) may be given to one or
more of the Grantors at the same or different times and (iii) may suspend the
rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part
without suspending all such rights (as specified by the Collateral Agent (acting
at the written direction of the Required Lenders) in its sole and absolute
discretion) and without waiving or otherwise affecting the Collateral Agent’s
rights to give additional notices from time to time suspending other rights so
long as an Event of Default has occurred and is continuing.
 
 
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ARTICLE IV
 
Security Interests in Personal Property
 
SECTION 4.01.                                Security Interest.  (a) As security
for the payment or performance, as the case may be, in full of the Obligations,
each Grantor hereby assigns and pledges to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, a security interest (the “Security Interest”) in, all right, title or
interest in or to any and all of the following assets and properties now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the “Article 9 Collateral”):
 
(i)           all Accounts;
 
(ii)           all Chattel paper;
 
(iii)           all cash and Deposit accounts;
 
(iv)           all Documents;
 
(v)           all Equipment;
 
(vi)           all General intangibles (except for “intent-to-use” applications
for trademark or service mark registrations filed pursuant to Section l(b) of
the Lanham Act, 15 U.S.C. § 1051 to the extent the security interest granted
hereunder would cause the invalidation of such application, unless and until an
Amendment to Allege Use or a Statement of Use under Sections l(c) and l(d) of
said Act has been filed);
 
(vii)           all Instruments;
 
(viii)           all Inventory;
 
(ix)           all Investment property;
 
(x)           all Letter-of-credit rights;
 
(xi)           all commercial tort claims;
 
(xii)           all books and records pertaining to the Article 9 Collateral;
 
(xiii)           all computer programs of such Grantor and all intellectual
property rights therein and all other proprietary information of such Grantor;
 
(xiv)           all Goods;
 
(xv)           all permits;
 
 
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(xvi)           all Software and all Software licensing rights, all writings,
plans, specifications and schematics, all engineering drawings, customer lists,
goodwill and licenses, and all recorded data of any kind or nature, regardless
of the medium of recording;
 
(xvii)           all Supporting obligations;
 
(xviii)           to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing;
 
Excluding, all Aircraft Collateral (which shall be granted exclusively under the
Aircraft Security Agreement), all Excluded Collateral and all Non-Owned
Equipment (including, without limitation all assets and properties relating
thereto described in clauses (i) through (xviii) above).

(b)           In the event any Grantor fails to make the necessary filings under
the terms of the Loan Documents, such Grantor hereby irrevocably authorizes the
Collateral Agent at any time and from time to time to file in any relevant
jurisdiction any initial financing statements (including fixture filings) with
respect to the Article 9 Collateral and the Aircraft Collateral granted under
the Aircraft Security Agreement and amendments thereto that (i) indicate the
Collateral made subject to the Lien of the Security Documents, and (ii) contain
the information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (a) whether such Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor and (b) in
the case of a financing statement filed as a fixture filing or covering
Article 9 Collateral constituting minerals or the like to be extracted or timber
to be cut, a sufficient description of the real property to which such Article 9
Collateral relates.  Each Grantor agrees to provide such information to the
Collateral Agent promptly upon request.
 
In the event any Grantor fails to make the necessary filings, the Collateral
Agent is further authorized to file with (i) the FAA (to the extent provided
under the Perfection Requirements) and the International Registry of Mobile
Assets (to the extent authorized pursuant to Section 2.17 of the Aircraft
Security Agreement) and (ii) the United States Patent and Trademark Office and
the United States Copyright Office (or any successor office or any similar
office in any other country) (to the extent authorized pursuant to Section
4.05(e)), such documents as may be necessary or advisable for the purpose of
perfecting, confirming, continuing, enforcing or protecting the Security
Interest granted by each Grantor hereunder or under the Intellectual Property
Security Agreement or the security interest granted by each Grantor under the
Aircraft Security Agreement, without the signature of any Grantor, if permitted,
and naming any Grantor or the Grantors as debtors and the Collateral Agent as
secured party.
 
(c)           The Security Interest is granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or in any way alter
or modify, any obligation or liability of any Grantor with respect to or arising
out of the Article 9 Collateral.
 
 
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(d)           Notwithstanding anything herein to the contrary, in no event shall
the security interest granted hereunder attach to any contract or agreement to
which a Grantor is a party or any of its rights or interests thereunder if and
for so long as the grant of such security interest shall constitute or result in
(i) the unenforceability of any right of the Grantor therein or (ii) in a breach
or termination pursuant to the terms of, or a default under, any such contract
or agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York
UCC or any other applicable law or principles of equity), provided, however,
that such security interest shall attach immediately at such time as the
condition causing such unenforceability shall be remedied and, to the extent
severable, shall attach immediately to any portion of such contract or agreement
that does not result in any of the consequences specified in (i) or
(ii) including, without limitation, any proceeds of such contract or agreement.
 
SECTION 4.02.                                Representations and
Warranties.  The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:
 
(a)           Each Grantor has good and valid rights in and title to the
Article 9 Collateral with respect to which it has purported to grant a Security
Interest hereunder and has full power and authority to grant to the Collateral
Agent the Security Interest in such Article 9 Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval that has been obtained.
 
(b)           The Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein, including the exact legal name
of each Grantor, is correct and complete as of the Closing Date.  The
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations to be
filed by the Grantors on the Closing Date in each governmental, municipal or
other office specified in Schedule 3.19(a) to the Credit Agreement (or specified
by notice from the Borrower to the Collateral Agent after the Closing Date in
the case of filings, recordings or registrations required by Section 5.06 or
Section 5.12 of the Credit Agreement), are all the filings, recordings and
registrations (other than filings required to be made in the United States
Patent and Trademark Office and the United States Copyright Office) that are
necessary to publish notice of and protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Collateral Agent
(for the benefit of the Secured Parties) in respect of all Article 9 Collateral
in which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration (other than filings
required to be made in the United States Patent and Trademark Office or the
United States Copyright Office) is necessary in any such jurisdiction, except
for Uniform Commercial Code financing statements as provided under applicable
law with respect to the filing of continuation statements.
 
(c)           Each Grantor represents and warrants that fully executed
intellectual property security agreements substantially in the form of
Exhibit II hereto (each, an “Intellectual Property Security Agreement”)
containing a description of all Article 9 Collateral consisting of Intellectual
Property with respect to United States Patents and United States registered
Trademarks (and Trademarks for which United States registration applications are
pending) and United States registered Copyrights have been delivered to the
Collateral Agent.  Such documents are in a condition when authorized pursuant to
Section 4.05(f) of this Agreement for recording by the United States Patent and
Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. §
261,15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as
applicable, to protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the benefit of
the Secured Parties) in respect of all Article 9 Collateral consisting of
Patents, Trademarks and Copyrights in which a security interest may be perfected
by filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions and, upon making such
recordation when permitted pursuant to Section 4.05(f) of this Agreement, no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Article 9 Collateral consisting of
Patents, Trademarks and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).
 
 
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(d)           Each Grantor represents and warrants that one or more fully
executed aircraft security agreements substantially in the form of Exhibit III
hereto (each, an “Aircraft Security Agreement”) containing a description of all
Aircraft Collateral will be filed by the Grantors on the Closing Date with the
FAA and recordation of interests thereunder with the International Registry of
Mobile Assets, in each case as required by the Perfection Requirements of the
Aircraft Security Agreement, to protect the validity of and to establish a
legal, valid and perfected security interest (in accordance with the Perfection
Requirements of the Aircraft Security Agreement in favor) of the Collateral
Agent (for the benefit of the Secured Parties) in respect of all Aircraft
Collateral.
 
(e)           The Security Interest constitutes (i) a legal and valid security
interest in all the Article 9 Collateral securing the payment and performance of
the Obligations,  and (ii) subject to the filings and exceptions described in
Sections 4.02(b) and (c), a perfected security interest in all Article 9
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the Uniform Commercial Code or other applicable law in such jurisdictions to
the extent required by the terms of the Security Documents.  The Security
Interest is and shall be prior to any other Lien on any of the Article 9
Collateral, other than Permitted Encumbrances that have priority as a matter of
law and Liens expressly permitted to be prior to the Security Interest pursuant
to Section 6.02 of the Credit Agreement.
 
(f)           The Article 9 Collateral is owned by the Grantors free and clear
of any Lien, except for Permitted Encumbrances.  None of the Grantors has filed
or consented to the filing of (i) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Article 9 Collateral, (ii) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any
Article 9 Collateral with the United States Patent and Trademark Office or the
United States Copyright Office or (iii) any assignment in which any Grantor
assigns any Article 9 Collateral or any security agreement or similar instrument
covering any Article 9 Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document, assignment,
security agreement or similar instrument is still in effect, except, in each
case, for Permitted Encumbrances.
 
 
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(g)           Schedule III lists all issued Patents and material Patent
applications, registrations and applications to register material Trademarks and
registered material Copyrights owned by such Grantor in its own name on the date
hereof.  Except as set forth in Schedule III, (i) such Grantor is the exclusive
owner of the entire and unencumbered right, title and interest in and to such
applications, registrations and issuances and (ii) none of the Intellectual
Property owned by any Grantor is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.
 
(h)           On the date hereof, all issued Patents, registrations of
Trademarks and registered Copyrights of such Grantor described on Schedule III
are subsisting, enforceable and unexpired and have not been abandoned.
 
(i)           Except as would not reasonably be expected to have a Material
Adverse Effect, the rights of such Grantor in or to the Patents, Trademarks and
Copyrights and other Intellectual Property owned by such Grantor, the operation
of such Grantor’s business, and to such Grantor’s knowledge, the use of the
Intellectual Property in connection therewith do not conflict with, infringe
upon, misappropriate, dilute, misuse or otherwise violate the rights of any
third party.  No claim has been asserted that the use of such Intellectual
Property does or may infringe upon the rights of any third party, in either
case, which conflict or infringement would reasonably be expected to have a
Material Adverse Effect.  To such Grantor’s knowledge, there is currently no
infringement or unauthorized use of any item of such Intellectual Property owned
by such Grantor that, either individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
 
(j)           No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity or
enforceability of, or such Grantor’s rights in, any Patent, Trademark or
Copyright or other Intellectual Property owned by such Grantor in any respect
that would reasonably be expected to have a Material Adverse Effect.  Such
Grantor is not aware of any uses of any item of such Intellectual Property owned
by such Grantor that could reasonably be expected to lead to such item becoming
invalid or unenforceable including unauthorized uses by third parties and uses
which would reasonably be expected to damage the goodwill of the business
associated with any of the Trademarks owned by such Grantor and Trademark
Licenses, which uses, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
 
SECTION 4.03.                                Covenants.  (a) Each Grantor agrees
promptly to notify the Collateral Agent in writing of any change (i) in
corporate name, (ii) in the location of its chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Article 9 Collateral owned by it, (iii) in its identity or type of
organization or corporate structure, (iv) in its Federal Taxpayer Identification
Number or organizational identification number or (v) in its jurisdiction of
organization.  Each Grantor agrees to promptly provide the Collateral Agent with
certified organizational documents reflecting any of the changes described in
the first sentence of this paragraph.  Each Grantor agrees not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the Uniform Commercial Code or otherwise that are required in
order for the Collateral Agent to continue at all times following such change to
have a valid, legal and perfected first priority security interest in all the
Article 9 Collateral.  Each Grantor agrees promptly to notify the Collateral
Agent if any portion of the Article 9 Collateral with a value in excess of
$2,500,000 owned or held by such Grantor is materially damaged or destroyed.
 
 
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(b)           Each Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Article 9 Collateral owned by
it as is consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to include
complete accounting records indicating all payments and proceeds received with
respect to any part of the Article 9 Collateral, and, at such time or times as
the Collateral Agent may reasonably request (acting at the written direction of
the Required Lenders), promptly to prepare and deliver to the Collateral Agent a
duly certified schedule or schedules in form and detail satisfactory to show the
identity, amount and location of any and all Article 9 Collateral.  Without
limiting the foregoing, at the time of delivery of financial statements required
by Section 5.04(a) or (b) of the Credit Agreement, the Borrower shall deliver to
the Collateral Agent a certificate executed by a Financial Officer of the
Borrower setting forth a true, complete and correct list of Aircraft, Airframes
and Engines leased outside of the United States as of a recent date.
 
(c)           Each year, at the time of delivery of annual financial statements
with respect to the preceding fiscal year pursuant to Section 5.04 of the Credit
Agreement, the Borrower shall deliver to the Collateral Agent a certificate
executed by a Financial Officer of the Borrower (a) setting forth the
information required pursuant to the Perfection Certificate or confirming that
there has been no change in such information since the date of such certificate
or the date of the most recent certificate delivered pursuant to this
Section 4.03(c) and (b) certifying that all Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings recordings or registrations required hereunder, including all refilings,
recordings and registrations, containing a description of the Collateral have
been filed of record in each governmental, municipal or other appropriate office
in each jurisdiction identified pursuant to clause (a) of this Section 4.03 to
the extent necessary to protect and perfect the Security Interest for a period
of not less than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period).  Each certificate delivered pursuant to this Section 4.03(c) shall
identify in the format of Schedule III to this Agreement and Schedules 1, 2, 3
or 4 to the Aircraft Security Agreement, as applicable, all Intellectual
Property and Aircraft Collateral (and exclusions thereto) of any Grantor in
existence or owned by any Grantor on the date thereof and not then listed on
such Schedules or previously so identified to the Collateral Agent.
 
 
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(d)           Each Grantor shall, at its own expense, take any and all actions
necessary to defend title to the Article 9 Collateral against all Persons and to
defend the Security Interest of the Collateral Agent in the Article 9 Collateral
and the priority thereof against any Lien not constituting a Permitted
Encumbrance.
 
(e)           Each Grantor agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Collateral Agent may from time to time
reasonably request consistent with the collateral filings required under the
Security Documents to better assure, preserve, protect and perfect the Security
Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of
this Agreement, the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith or therewith.  If any amount payable under or in connection
with any of the Article 9 Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Collateral Agent, duly endorsed in a
manner satisfactory to the Collateral Agent.
 
Without limiting the generality of the foregoing, each Grantor hereby authorizes
the Collateral Agent, with prompt notice thereof to the Grantors, to supplement
this Agreement by supplementing Schedule III hereto or adding additional
schedules hereto to specifically identify any asset or item that may constitute
Patents or material Copyrights, Licenses, or Trademarks for which a Security
Interest is required to be granted hereunder pursuant to the terms of the Loan
Documents; provided that any Grantor shall have the right, exercisable
within 10 days after it has been notified by the Collateral Agent (acting upon
the written direction of the Required Lenders) of the specific identification of
such Collateral, to advise the Collateral Agent in writing of any inaccuracy of
the representations and warranties made by such Grantor hereunder with respect
to such Collateral.  Each Grantor agrees that it will use its reasonable best
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such Collateral within 30 days after the date it has been notified by the
Collateral Agent of the specific identification of such Collateral.
 
(f)           The Collateral Agent and such Persons as the Collateral Agent may
reasonably designate shall have the right (acting at the written direction of
the Required Lenders but, so long as no Event of Default has occurred and is
continuing, no more than once per year), at the Grantors’ sole cost and expense,
on reasonable advance notice and so long as an Event of Default has not occurred
and is continuing, without interference with the operation, use, maintenance and
lease of any Aircraft Collateral, to inspect the Aircraft Collateral and the
Article 9 Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Aircraft
Collateral or the Article 9 Collateral is located, to discuss the Grantors’
affairs with the officers of the Grantors and their independent accountants and
to verify under reasonable procedures, in accordance with Section 5.07 of the
Credit Agreement, the validity, amount, quality, quantity, value, condition and
status of, or any other matter relating to, the Aircraft Collateral and the
Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral
in the possession of any third person, by contacting, following the occurrence
and during the continuance of an Event of Default, Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such a
verification.  The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party.
 
 
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(g)           At its option, the Collateral Agent (acting at the written
direction of the Required Lenders) may (after providing reasonable notice to the
Grantors) discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Article 9
Collateral and not permitted pursuant to Section 6.02 of the Credit Agreement,
and may pay for the maintenance and preservation of the Article 9 Collateral to
the extent any Grantor fails to do so as required by the Credit Agreement or
this Agreement, and each Grantor jointly and severally agrees to reimburse the
Collateral Agent on demand for any payment made or any expense incurred by the
Collateral Agent pursuant to the foregoing authorization; provided that nothing
in this paragraph shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any Grantor
with respect to taxes, assessments, charges, fees, Liens, security interests or
other encumbrances and maintenance as set forth herein or in the other Loan
Documents.
 
(h)           If at any time any Grantor shall take a security interest in any
property of an Account Debtor or any other Person to secure payment and
performance of an Account, such Grantor shall promptly assign such security
interest to the Collateral Agent.  Such assignment need not be filed of public
record unless necessary to continue the perfected status of the security
interest against creditors of and transferees from the Account Debtor or other
Person granting the security interest.
 
(i)           Each Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral, all in
accordance with the terms and conditions thereof, and each Grantor jointly and
severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.
 
(j)           None of the Grantors shall make or permit to be made an
assignment, pledge or hypothecation of the Aircraft Collateral or Article 9
Collateral or shall grant any other Lien in respect of the Aircraft Collateral
or Article 9 Collateral, except as permitted by the Credit Agreement, and if
applicable, the Aircraft Security Agreement.  None of the Grantors shall make or
permit to be made any transfer of the Aircraft Collateral or Article 9
Collateral and each Grantor shall remain at all times in possession of the
Article 9 Collateral owned by it, except that (i) Inventory may be sold ,
swapped, or exchanged in the ordinary course of business, and (ii) the Grantors
may use and dispose of the Article 9 Collateral and the Aircraft Collateral in
any lawful manner not inconsistent with the provisions of this Agreement, the
Credit Agreement or any other Loan Document unless and until the Administrative
Agent shall notify the Grantors that an Event of Default shall have occurred and
be continuing and has notified Grantors that during the continuance thereof the
Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of
any Aircraft Collateral or Article 9 Collateral.  Without limiting the
generality of the foregoing, each Grantor agrees that it shall be permitted to
transfer control or possession of Inventory to a warehouseman, agent, bailee,
consignee or processor; provided that in the event that the value of any
Inventory is in excess of $2,500,000 (based on the Grantors’ book value
thereof), such warehouseman, agent, bailee, consignee or processor shall have
been notified of the Security Interest and shall have acknowledged pursuant to a
notice of interest that such warehouseman, agent, bailee, consignee or processor
holds the Inventory for the benefit of the Collateral Agent subject to the
Security Interest and, following the occurrence and during the continuance of an
Event of Default, shall act upon the instructions of the Collateral Agent
without further consent from the Grantor, and that such warehouseman, agent,
bailee, consignee or processor further agrees to waive and release any Lien held
by it with respect to such Inventory, whether arising by operation of law or
otherwise; provided, however, for Aircraft Collateral which is Inventory, the
terms of the Aircraft Security Agreement shall govern the Grantors’ obligations
with respect to any warehouseman, agent, bailee, consignee or processor in
control or possession of such level of Inventory.
 
 
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(k)           None of the Grantors will, without the Collateral Agent’s prior
written consent, grant any extension of the time of payment of any Accounts
included in the Article 9 Collateral, compromise, compound or settle the same
for less than the full amount thereof, release, wholly or partly, any Person
liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, compromises, settlements, releases, credits or
discounts granted or made in the ordinary course of business and consistent with
its current practices and in accordance with such prudent and standard practice
used in industries that are the same as or similar to those in which such
Grantor is engaged.
 
(l)           The Grantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory and
Equipment in accordance with the requirements set forth in Section 5.02 of the
Credit Agreement and, with respect to the Aircraft Collateral, in accordance
with the requirements of the Aircraft Security Agreement.  Each Grantor
irrevocably makes, constitutes and appoints the Collateral Agent (and all
officers, employees or agents designated by the Collateral Agent) as such
Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during
the continuance of an Event of Default, of making, settling and adjusting claims
in respect of Article 9 Collateral under policies of insurance, endorsing the
name of such Grantor on any check, draft, instrument or other item of payment
for the proceeds of such policies of insurance and for making all determinations
and decisions with respect thereto.  In the event that any Grantor at any time
or times shall fail to obtain or maintain any of the policies of insurance
required hereby or to pay any premium in whole or part relating thereto, the
Collateral Agent (acting at the written direction of the Required Lenders) may,
without waiving or releasing any obligation or liability of the Grantors
hereunder or any Event of Default, in its sole discretion, obtain and maintain
such policies of insurance and pay such premium and take any other actions with
respect thereto as the Required Lenders deem advisable.  All sums disbursed by
the Collateral Agent in connection with this paragraph, including reasonable
attorneys’ fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Grantors to the Collateral Agent and shall be
additional Obligations secured hereby.
 
(m)           Each Grantor shall maintain records of its Chattel Paper and its
books, records and documents evidencing or pertaining thereto.
 
 
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(n)           On each and every occasion that any Grantor acquires any Aircraft
Collateral or registers any Aircraft Collateral in connection with a lease
thereof, such Grantor shall comply with the requirements set forth in Section
2.17 of the Aircraft Security Agreement.
 
SECTION 4.04.                                Reserved.
 
SECTION 4.05.                                Covenants Regarding Patent,
Trademark and Copyright Collateral.
 
(a)           Each Grantor agrees that it will not do any act or omit do to any
act (and will exercise commercially reasonable efforts to prevent its licensees
from doing any act or omitting to do any act) whereby any Patent acquired after
the date of this Agreement that is material to the conduct of such Grantor’s
business may become forfeited, abandoned, invalidated or dedicated to the
public, and agrees that it shall mark any products covered by any such Patent
with the relevant patent number as necessary and sufficient to establish and
preserve its maximum rights under applicable patent laws.
 
(b)           Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark acquired after the date of this Agreement
that is material to the conduct of such Grantor’s business, (i) continue to use
such Trademark and maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law, (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights and (v) not do any act or knowingly omit to do any act
whereby such Trademark may become invalidated or impaired in any way.
 
(c)           Each Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a material Copyright that is
acquired after the date of this Agreement, (i) continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws, (ii) not do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired and (iii) not do any act whereby any material portion of the
Copyrights may fall into the public domain.
 
(d)           Each Grantor (either itself or through its licensees or
sublicensees) will not do any act that knowingly uses any Intellectual Property
that is material to the conduct of its business to infringe the intellectual
property rights of any other Person.
 
(e)           In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file (i) an application for any Patent,
Trademark or Copyright, (ii) for the registration of any Trademark or Copyright
or (iii) a statement to allege use (or the equivalent) for any trademark
application or service mark application with the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, unless, if such Patents, Trademarks and/or
Copyrights is material to the conduct of its business, it promptly informs the
Collateral Agent, and executes and delivers any and all agreements, instruments,
documents and papers as are necessary to evidence the Collateral Agent’s
security interest in such Patent, Trademark or Copyright, and each Grantor
hereby appoints the Collateral Agent as its attorney-in-fact to execute and file
such writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.
 
 
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(f)           Each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain each issued Patent and each
registration of the Trademarks and Copyrights acquired after the date of this
Agreement that is material to the conduct of its business, including timely
filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if consistent with good
business judgment, to initiate opposition, interference and cancelation
proceedings against third parties.
 
(g)           Each Grantor agrees that, should it obtain an ownership interest
in any  Intellectual Property that is material to the conduct of its business
which is not, as of the date hereof, a part of the Collateral (the
“After-Acquired Intellectual Property”), (i) the provisions of this Section 4.05
shall automatically apply thereto, (ii) any such After-Acquired Intellectual
Property, and in the case of Trademarks, the goodwill of the business connected
therewith or symbolized thereby, shall automatically become part of the
Article 9 Collateral, (iii) it shall give prompt written notice thereof to the
Collateral Agent in accordance herewith, and (iv) it shall provide the
Collateral Agent promptly with an amended Schedule III and execute, deliver and
have recorded any and all agreements, instruments, documents and papers as are
required to evidence the security interest of the Collateral Agent and the
Secured Parties in such After-Acquired Intellectual Property and general
intangibles of such Grantor relating thereto or represented thereby.
 
SECTION 4.06.                                Covenants Regarding Aircraft
Collateral.
 
(a)           (a) Each Grantor agrees that it will maintain the Aircraft
Collateral in accordance with the terms and conditions of Article 2 of the
Aircraft Security Agreement.
 
(b)           Schedule 5 to the Aircraft Security Agreement sets forth a true
and complete list of all Aircraft Collateral registered under the laws of any
foreign nation as of the Closing Date.
 
(c)           If and whenever the Grantors shall wish to add another Spare Parts
Location, the Grantors (i) will furnish to the Collateral Agent a supplement to
the Aircraft Security Agreement in such form as attached to the Aircraft
Security Agreement and (ii) comply with the other terms and conditions of
Section 2.05 of the Aircraft Security Agreement.
 
 
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ARTICLE V
 
Remedies
 
SECTION 5.01.                                Remedies Upon Default.  Upon the
occurrence and during the continuance of an Event of Default, each Grantor
agrees to deliver each item of Collateral to the Collateral Agent on demand
(acting at the written direction of the Required Lenders), and it is agreed that
the Collateral Agent shall have the right to take any of or all the following
actions at the same or different times:  (a) with respect to any Article 9
Collateral consisting of Intellectual Property to cause the Security Interest to
become an assignment, transfer and conveyance of any of or all such Article 9
Collateral by the applicable Grantors to the Collateral Agent (or its nominees
or designees), or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or nonexclusive basis, any such Article 9
Collateral on such terms and conditions and in such manner as the Collateral
Agent (acting at the written direction of the Required Lenders) shall determine
(other than in violation of any then-existing licensing arrangements to the
extent that waivers cannot be obtained), and (b) with or without legal process
and with or without prior notice or demand for performance, to take possession
of the Article 9 Collateral and without liability for trespass to enter any
premises where the Article 9 Collateral may be located for the purpose of taking
possession of or removing the Article 9 Collateral and, generally, to exercise
any and all rights afforded to a secured party under the Uniform Commercial Code
or other applicable law.  Without limiting the generality of the foregoing, each
Grantor agrees that the Collateral Agent shall have the right, subject to the
mandatory requirements of applicable law, to sell or otherwise dispose of all or
any part of the Collateral at a public or private sale or at any broker’s board
or on any securities exchange, for cash, upon credit or for future delivery as
the Collateral Agent (acting at the written direction of the Required Lenders)
shall deem appropriate.  The Collateral Agent (acting at the written direction
of the Required Lenders) shall be authorized at any such sale of securities (if
it deems it advisable to do so) to restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and upon consummation of any such sale the
Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at
any sale of Collateral shall hold the property sold absolutely free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to
the extent permitted by law) all rights of redemption, stay and appraisal which
such Grantor now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.
 
The Collateral Agent shall give the applicable Grantors 20 days’ written notice
(which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of
the Collateral Agent’s intention to make any sale of Collateral.  Such notice,
in the case of a public sale, shall state the time and place for such sale and,
in the case of a sale at a broker’s board or on a securities exchange, shall
state the board or exchange at which such sale is to be made and the day on
which the Collateral, or portion thereof, will first be offered for sale at such
board or exchange.  Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the Collateral
Agent may fix and state in the notice (if any) of such sale.  At any such sale,
the Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Collateral Agent (acting at the written
direction of the Required Lenders) may (in its sole and absolute discretion)
determine.  The Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given.  The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned.  In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice.  At any public (or, to the extent permitted
by law, private) sale made pursuant to this Agreement, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Grantor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor.  For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Collateral Agent shall be free to carry
out such sale pursuant to such agreement and no Grantor shall be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full.  As an alternative to exercising the power of sale herein
conferred upon it, the Collateral Agent (acting at the written direction of the
Required Lenders) may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.  Any
sale pursuant to the provisions of this Section 5.01 shall be deemed to conform
to the commercially reasonable standards as provided in Section 9-610(b) of the
New York UCC or its equivalent in other jurisdictions.
 
 
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SECTION 5.02.                                Application of Proceeds.  Following
the occurrence and during the continuance of an Event of Default all payments
(together with the proceeds of any collection of Collateral  or “Collateral”
granted under any other Security Document) shall be applied as follows:
 
FIRST, to the payment of all costs and expenses incurred by the Collateral Agent
in connection with the sale of Collateral granted hereunder and under the other
Security Documents, including all court costs and the fees and expenses of its
agents and legal counsel, the repayment of all advances made by the Collateral
Agent hereunder or under any other Loan Document on behalf of any Grantor and
any other costs or expenses incurred in connection with the exercise of any
right or remedy hereunder or under any other Security Document;
 
 
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SECOND, to the payment of all costs and expenses incurred by the Administrative
Agent or the Collateral Agent (to the extent not reimbursed under the preceding
paragraph) in connection with this Agreement, any other Loan Document or any of
the Obligations, including all court costs and the fees and expenses of its
agents and legal counsel, the repayment of all advances made by the
Administrative Agent hereunder or under any other Loan Document on behalf of any
Grantor and any other costs or expenses incurred in connection with the exercise
of any right or remedy hereunder or under any other Loan Document;
 
THIRD, to the payment in full of the Obligations (the amounts so applied to be
distributed among the Secured Parties pro rata in accordance with the amounts of
the Obligations owed to them on the date of any such distribution); and
 
FOURTH, to the Grantors, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.
 
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement.  Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
 
SECTION 5.03.                                Grant of License to Use
Intellectual Property.  For the purpose of enabling the Collateral Agent to
exercise rights and remedies under this Agreement at such time as the Collateral
Agent shall be lawfully entitled to exercise such rights and remedies, each
Grantor hereby grants to the Collateral Agent an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to the
Grantors) to use, license or sublicense any of the Article 9 Collateral
consisting of Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located, and including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof.  The use of such license by the Collateral
Agent may be exercised, at the option of the Collateral Agent (acting at the
written direction of the Required Lenders), upon the occurrence and during the
continuation of an Event of Default; provided that any license, sublicense or
other transaction entered into by the Collateral Agent in accordance herewith
shall be binding upon the Grantors notwithstanding any subsequent cure of an
Event of Default.
 
SECTION 5.04.                                Securities Act.  In view of the
position of the Grantors in relation to the Pledged Collateral, or because of
other current or future circumstances, a question may arise under the Securities
Act of 1933, as now or hereafter in effect, or any similar statute hereafter
enacted analogous in purpose or effect (such Act and any such similar statute as
from time to time in effect being called the “Federal Securities Laws”) with
respect to any disposition of the Pledged Collateral permitted hereunder.  Each
Grantor understands that compliance with the Federal Securities Laws might very
strictly limit the course of conduct of the Collateral Agent if the Collateral
Agent (acting at the written direction of the Required Lenders) were to attempt
to dispose of all or any part of the Pledged Collateral, and might also limit
the extent to which or the manner in which any subsequent transferee of any
Pledged Collateral could dispose of the same.  Similarly, there may be other
legal restrictions or limitations affecting the Collateral Agent in any attempt
to dispose of all or part of the Pledged Collateral under applicable Blue Sky or
other state securities laws or similar laws analogous in purpose or
effect.  Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof.  Each Grantor acknowledges
and agrees that in light of such restrictions and limitations, the Collateral
Agent (acting at the written direction of the Required Lenders), in its sole and
absolute discretion (a) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such Pledged Collateral or
part thereof shall have been filed under the Federal Securities Laws and (b) may
approach and negotiate with a single potential purchaser to effect such
sale.  Each Grantor acknowledges and agrees that any such sale might result in
prices and other terms less favorable to the seller than if such sale were a
public sale without such restrictions.  In the event of any such sale, the
Collateral Agent shall incur no responsibility or liability for selling all or
any part of the Pledged Collateral at a price that the Collateral Agent (acting
at the written direction of the Required Lenders), in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a single purchaser were approached.  The provisions of this
Section 5.04 will apply notwithstanding the existence of a public or private
market upon which the quotations or sales prices may exceed substantially the
price at which the Collateral Agent sells.
 
 
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SECTION 5.05.                                Registration.  Each Grantor agrees
that, upon the occurrence and during the continuance of an Event of Default, if
for any reason the Collateral Agent (acting at the written direction of the
Required Lenders) desires to sell any of the Pledged Collateral at a public
sale, it will, at any time and from time to time, upon the written request of
the Collateral Agent (acting at the written direction of the Required Lenders),
use its best efforts to take or to cause the issuer of such Pledged Collateral
to take such action and prepare, distribute and/or file such documents, as are
required or desirable to permit the public sale of such Pledged
Collateral.  Each Grantor further agrees to indemnify, defend and hold harmless
the Collateral Agent, each other Secured Party, any underwriter and their
respective officers, directors, affiliates and controlling persons from and
against all loss, liability, expenses, costs of counsel (including, without
limitation, reasonable fees and expenses of legal counsel to the Collateral
Agent), and claims (including the costs of investigation) that they may incur
insofar as such loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
in any thereof not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information furnished in writing
to such Grantor or the issuer of such Pledged Collateral by the Collateral Agent
or any other Secured Party expressly for use therein.  Each Grantor further
agrees, upon such written request referred to above, to use its best efforts to
qualify, file or register, or cause the issuer of such Pledged Collateral to
qualify, file or register, any of the Pledged Collateral under the Blue Sky or
other securities laws of such states as may be requested by the Collateral Agent
(acting at the written direction of the Required Lenders) and keep effective, or
cause to be kept effective, all such qualifications, filings or
registrations.  Each Grantor will bear all costs and expenses of carrying out
its obligations under this Section 5.05.
 
 
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ARTICLE VI
 
Indemnity, Subrogation and Subordination
 
SECTION 6.01.                                Indemnity and Subrogation.  In
addition to all such rights of indemnity and subrogation as the Guarantors may
have under applicable law (but subject to Section 6.03), the Borrower agrees
that (a) in the event a payment of an obligation shall be made by any Guarantor
under this Agreement, the Borrower shall indemnify such Guarantor for the full
amount of such payment and such Guarantor shall be subrogated to the rights of
the Person to whom such payment shall have been made to the extent of such
payment and (b) in the event any assets of any Grantor shall be sold pursuant to
this Agreement or any other Security Document to satisfy in whole or in part an
obligation owed to any Secured Party, the Borrower shall indemnify such Grantor
in an amount equal to the greater of the book value or the fair market value of
the assets so sold.
 
SECTION 6.02.                                Contribution and Subrogation.  Each
Guarantor and Grantor (a “Contributing Party”) agrees (subject to Section 6.03)
that, in the event a payment shall be made by any other Guarantor hereunder in
respect of any Obligation or assets of any other Grantor shall be sold pursuant
to any Security Document to satisfy any Obligation owed to any Secured Party and
such other Guarantor or Grantor (the “Claiming Party”) shall not have been fully
indemnified by the Borrower as provided in Section 6.01, the Contributing Party
shall indemnify the Claiming Party in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as the case may be, in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Party on the date hereof
and the denominator shall be the aggregate net worth of all the Guarantors and
Grantors on the date hereof (or, in the case of any Guarantor or Grantor
becoming a party hereto pursuant to Section 7.14, the date of the supplement
hereto executed and delivered by such Guarantor or Grantor).  Any Contributing
Party making any payment to a Claiming Party pursuant to this Section 6.02 shall
be subrogated to the rights of such Claiming Party under Section 6.01 to the
extent of such payment.
 
SECTION 6.03.                                Subordination.  (a) Notwithstanding
any provision of this Agreement to the contrary, all rights of the Guarantors
and Grantors under Sections 6.01 and 6.02 and all other rights of indemnity,
contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Obligations.  No
failure on the part of the Borrower or any Guarantor or Grantor to make the
payments required by Sections 6.01 and 6.02 (or any other payments required
under applicable law or otherwise) shall in any respect limit the obligations
and liabilities of any Guarantor or Grantor with respect to its obligations
hereunder, and each Guarantor and Grantor shall remain liable for the full
amount of the obligations of such Guarantor or Grantor hereunder.
 
 
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(b)           Each Guarantor and Grantor hereby agrees that all Indebtedness and
other monetary obligations owed by it to any other Guarantor, Grantor or any
other Subsidiary shall be fully subordinated to the indefeasible payment in full
in cash of the Obligations.
 
 
ARTICLE VII
 
Miscellaneous
 
SECTION 7.01.                                Notices.  All communications and
notices hereunder shall (except as otherwise expressly permitted herein) be in
writing and given as provided in Section 9.01 of the Credit Agreement.  All
communications and notices hereunder to any Subsidiary Guarantor shall be given
to it in care of the Borrower as provided in Section 9.01 of the Credit
Agreement.
 
SECTION 7.02.                                Waivers; Amendment.  (a) No failure
or delay by the Collateral Agent or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies of the Collateral Agent and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have.  No waiver
of any provision of this Agreement or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 7.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given.  Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether the
Collateral Agent or any Lender may have had notice or knowledge of such Default
at the time.  No notice or demand on any Loan Party in any case shall entitle
any Loan Party to any other or further notice or demand in similar or other
circumstances.
 
(b)           Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Loan Party or Loan Parties with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 9.08 of the Credit Agreement.
 
SECTION 7.03.                                Collateral Agent’s Fees and
Expenses; Indemnification.  (a) The parties hereto agree that the Collateral
Agent shall be entitled to reimbursement of its expenses incurred hereunder as
provided in Section 9.05 of the Credit Agreement.
 
(b)           Without limitation of its indemnification obligations under the
other Loan Documents, each Grantor and each Guarantor jointly and severally
agrees to indemnify the Collateral Agent and the other Indemnitees (as defined
in Section 9.05(b) of the Credit Agreement) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of, the execution, delivery
or performance of this Agreement or any claim, litigation, investigation or
proceeding relating to any of the foregoing agreement or instrument contemplated
hereby, or to the Collateral, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
 
 
28

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(c)           Without limiting the application of Section 7.03(b) hereof and
without duplication of the Borrower’s obligations under Section 9.05 of the
Credit Agreement, each Grantor agrees, jointly and severally, to pay or
reimburse the Collateral Agent for any and all reasonable fees, costs and
expenses of whatever kind of nature incurred in connection with the creation,
preservation or protection of the Collateral Agent’s liens on, and security
interest in, the Collateral, including, without limitation, all fees and taxes
in connection with the recording or filing of instruments and documents in
public offices, payment or discharge of any taxes or liens upon or in respect of
the Collateral, premiums for insurance with respect to the Collateral and all
other fees, costs and expenses in connection with protecting, maintaining or
preserving the Collateral and the Collateral Agent’s interest therein, whether
through judicial proceedings or otherwise, or in defending or prosecuting any
actions, suits or proceedings arising out of or relating to the Collateral.
 
(d)           To the extent not duplicative of Section 9.05(b) of the Credit
Agreement and without limiting the application of 7.03(b) or (c) hereof, each
Grantor agrees, jointly and severally, to pay, indemnify, and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Grantor in this Agreement, any other Loan Document
or in any writing contemplated by or made or delivered pursuant to or in
connection with this Agreement or any other Loan Document.
 
(e)           Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents.  The provisions
of this Section 7.03 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, any investigation made by or on
behalf of the Collateral Agent or any other Secured Party or the resignation or
removal of the Collateral Agent to the extent such claim relates to The Bank of
New York Mellon’s capacity as Collateral Agent hereunder.  All amounts due under
this Section 7.03 shall be payable on written demand therefor.
 
SECTION 7.04.                                Successors and Assigns.  Whenever
in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Guarantor, Grantor or
the Collateral Agent that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.
 
 
29

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SECTION 7.05.                                Survival of Agreement.  All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Collateral Agent
and the Lenders and shall survive the execution and delivery of the Loan
Documents and the making of any Loans, regardless of any investigation made by
any Lender or on its behalf and notwithstanding that the Collateral Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under any Loan Document is outstanding and unpaid and so long as the Commitments
have not expired or terminated.
 
SECTION 7.06.                                Counterparts; Effectiveness;
Several Agreement.  This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute a single contract.  Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.  This Agreement shall become
effective as to any Loan Party when a counterpart hereof executed on behalf of
such Loan Party shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Loan Party and the Collateral Agent
and their respective permitted successors and assigns, and shall inure to the
benefit of such Loan Party, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Loan Party shall
have the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly contemplated by this Agreement or the Credit
Agreement.  This Agreement shall be construed as a separate agreement with
respect to each Loan Party and may be amended, modified, supplemented, waived or
released with respect to any Loan Party without the approval of any other Loan
Party and without affecting the obligations of any other Loan Party hereunder.
 
SECTION 7.07.                                Severability.  Any provision of
this Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or uneforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.  The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
 
SECTION 7.08.                                Right of Set-Off.  If an Event of
Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of any Subsidiary Guarantor against any of and all the
obligations of such Subsidiary Guarantor now or hereafter existing under this
agreement owed to such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured.  The rights of each Lender under this Section 7.08 are in addition to
other rights and remedies (including other rights of set-off) which such Lender
may have.
 
 
30

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SECTION 7.09.                                Governing Law; Jurisdiction;
Consent to Service of Process.  (a) This Agreement shall be construed in
accordance with and governed by the law of the State of New York.
 
(b)           Each of the Loan Parties hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court.  Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Agreement or any other Loan Document shall
affect any right that the Collateral Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against any Grantor or Guarantor, or its properties in the courts of
any jurisdiction.
 
(c)           Each of the Loan Parties hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this
Section 7.09.  Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
 
SECTION 7.10.                                WAIVER OF JURY TRIAL.  EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 7.10.
 
SECTION 7.11.                                Headings.  Article and Section
headings and the Table of Contents used herein are for convenience of reference
only, are not part of this Agreement and are not to affect the construction of,
or to be taken into consideration in interpreting, this Agreement.
 
 
31

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SECTION 7.12.                                Security Interest Absolute.  All
rights of the Collateral Agent hereunder, the Security Interest, the grant of a
security interest in the Pledged Collateral and all obligations of each Grantor
and Guarantor hereunder shall be absolute and unconditional irrespective of
(a) any lack of validity or enforceability of the Credit Agreement, any other
Loan Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any other Loan Document or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor or Guarantor in respect of
the Obligations or this Agreement.
 
SECTION 7.13.                                Termination or Release.  (a) This
Agreement, the Guarantees made herein, the Security Interest and all other
security interests granted hereby shall terminate when all the Loan Document
Obligations have been indefeasibly paid in full and the Lenders have no further
commitment to lend under the Credit Agreement.
 
(b)           A Subsidiary Guarantor shall automatically be released from its
obligations hereunder and the Security Interest in the Collateral of such
Subsidiary Guarantor shall be automatically released upon the consummation of
any transaction permitted by the Credit Agreement as a result of which such
Subsidiary Guarantor ceases to be a Subsidiary of the Borrower; provided that
the Required Lenders shall have consented to such transaction (to the extent
required by the Credit Agreement) and the terms of such consent did not provide
otherwise.
 
(c)           Upon any sale or other transfer by any Grantor of any Collateral
that is permitted under the Credit Agreement, or upon the effectiveness of any
written consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 9.08 of the Credit Agreement, the security
interest in such Collateral shall be automatically released.
 
(d)           Upon the delivery by the Borrower of an Officer’s Certificate in
the form of Exhibit H to the Aircraft Security Agreement in connection with the
incurrence of secured Indebtedness permitted under the Credit Agreement, and
without the consent of any Lender, Collateral Agent will promptly, at Grantor’s
cost and expense, execute and authorize or consent to the filing and/or delivery
of such lien releases and/or disclaimer statements (in form and substance
reasonably satisfactory to the Collateral Agent) as are requested under and
attached to such Officer’s Certificate.
 
(e)           In connection with any termination or release pursuant to
paragraph (a), (b) or (c), the Collateral Agent shall execute and deliver to any
Grantor, at such Grantor’s expense, all documents (in form and substance
reasonably satisfactory to the Collateral Agent) that such Grantor shall
reasonably request to evidence such termination or release.  Any execution and
delivery of documents pursuant to this Section 7.13 shall be without recourse to
or warranty by the Collateral Agent.
 
 
32

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SECTION 7.14.                                Additional Subsidiaries.  Pursuant
to Section 5.12 of the Credit Agreement, each Subsidiary of a Loan Party that
was not in existence or not a Subsidiary on the date of the Credit Agreement is
required to enter into this Agreement as a Subsidiary Guarantor upon becoming
such a Subsidiary, except as otherwise provided in Section 5.12 of the Credit
Agreement.  Upon execution and delivery by the Collateral Agent and a Subsidiary
of an instrument in the form of Exhibit I hereto, such Subsidiary shall become a
Subsidiary Guarantor hereunder with the same force and effect as if originally
named as a Subsidiary Guarantor herein.  The execution and delivery of any such
instrument shall not require the consent of any other Loan Party hereunder.  The
rights and obligations of each Loan Party hereunder shall remain in full force
and effect notwithstanding the addition of any new Loan Party as a party to this
Agreement.
 
SECTION 7.15.                                Collateral Agent Appointed
Attorney-in-Fact.  Each Grantor hereby appoints the Collateral Agent the
attorney-in-fact of such Grantor for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instrument that the
may be necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest.  Without limiting the
generality of the foregoing, the Collateral Agent shall have the right (acting
at the written direction of the Required Lenders), upon the occurrence and
during the continuance of an Event of Default, with full power of substitution
either in the Collateral Agent’s name or in the name of such Grantor (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof; (b) to demand, collect, receive payment of, give receipt for
and give discharges and releases of all or any of the Collateral; (c) to sign
the name of any Grantor on any invoice or bill of lading relating to any of the
Collateral; (d) to send verifications of Accounts Receivable to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral; (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral;
(g) to notify, or to require any Grantor to notify, Account Debtors to make
payment directly to the Collateral Agent; and (h) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things necessary to carry
out the purposes of this Agreement, as fully and completely as though the
Collateral Agent were the absolute owner of the Collateral for all purposes;
provided that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby.  The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct as determined by a final, non-appealable order
of a court of competent jurisdiction.
 
 
33

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SECTION 7.16.                                Liability of the Collateral
Agent.  The parties hereto agree that  the Collateral Agent shall be afforded
all of the rights, privileges, protections, indemnities and immunities afforded
to the Collateral Agent under the Credit Agreement in connection with its
execution of this Agreement  and the performance of its duties hereunder.
 
 
34

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
 
ALLEGIANT TRAVEL COMPANY
 
By:  ______________________________________
Name:
Title:
 

 
[GUARANTOR SUBSIDIARY]
 
By:  ______________________________________
Name:
Title:
 
 
35

--------------------------------------------------------------------------------

 
 
THE BANK OF NEW YORK MELLON,
AS COLLATERAL AGENT,

By:  ______________________________________
Name:
Title:
 
 
36

--------------------------------------------------------------------------------

 
 
Schedule I
to the Guarantee and
Collateral Agreement
 
SUBSIDIARY GUARANTORS
 
Allegiant Travel Company owns 100% of the following subsidiaries:
Allegiant Air, LLC
Allegiant Vacations, LLC
AFH, Inc.
Allegiant Information Systems, Inc.
Sunrise Asset Management, LLC
 
 
I-1

--------------------------------------------------------------------------------

 
 
Schedule II
to the Guarantee and
Collateral Agreement
 
EQUITY INTERESTS
 
Issuer
Number of Certificate
Registered Owner
Number and Class of Equity Interests
Percentage of Equity Interests
Allegiant Air, LLC
1
Allegiant Travel Company
 
6,683,333
Shares
 
 
100%
 
 
Allegiant Vacations, LLC
1
Allegiant Travel Company
 
100,000
Shares
 
100%
AFH, Inc.
1
Allegiant Travel Company
 
1,000
Common Stock
 
100%
Allegiant Information Systems, Inc.
1
 
Allegiant Travel Company
 
1,000
Common Stock
100%
Sunrise Asset Management, LLC
1
Allegiant Travel Company
 
100,000
Shares
 
100%

 
II-1

--------------------------------------------------------------------------------

 

DEBT SECURITIES
 

Issuer
Principal
Amount
Date of Note
Maturity Date
Grantor
[…***…]
[…***…]
August 28, 2008
 
Allegiant Travel Company
[…***…]
[…***…]
March 12, 2010
 
Allegiant Travel Company
[…***…]
[…***…]
March 26, 2010
 
Allegiant Travel Company
[…***…]
[…***…]
March 31, 2010
 
Allegiant Travel Company
[…***…]
[…***…]
May 13, 2010
 
Allegiant Travel Company
[…***…]
[…***…]
February 10, 2009
 
Allegiant Air, LLC

 
III-1

--------------------------------------------------------------------------------

 
 
Schedule III
to the Guarantee and
Collateral Agreement
 
INTELLECTUAL PROPERTY
 
ALLEGIANT TRAVEL COMPANY
 

 
U.S. Copyrights
 
None
 
 
Licenses/Sublicenses as Licensor on Date Hereof
 
No material licenses
 
 
Licenses/Sublicenses as Licensee on Date Hereof
 
No material licenses
 
 
U.S. Trademarks
 
 
III-2

--------------------------------------------------------------------------------

 
 
 
Trademark
Owner Name
United States
Canada
Mexico
Comments
ALLEGIANT®
Allegiant Travel Company
Have registration
3,841,042
1,469,734
(Application filed 2-16-2010)
Have registration
1171162
Have U.S. and Mexico registrations.  Application filed by foreign associate in
Canada.
ALLEGIANT AIR®
Allegiant Travel Company
Have registration
2,444,756
1,469,735
(Application filed 2-16-10)
Have registration
1,148,048
Application filed in Canada.  U.S. assignment of ownership filed and updated.
ALLEGIANT and Design (logo)®
 
Allegiant Travel Company
85/232,134 (Application filed 2-2-11)
   
U.S. application filed.  Foreign associates to file in Canada and Mexico.
ALLEGIANT PUBLISHING™
Allegiant Travel Company
77/922,494
(Notice of Allowance 8-10-10.  First extension request granted.  Statement of
use due 8-10-11)
No
No
Application to be filed in U.S. only.
ALLEGIANT TRAVEL COMPANY®
Allegiant Travel Company
Have registration
3,355,590
Have registration
1,364,366
Have registration
1,054,807
Have registrations in all three countries.
ALLEGIANT VACATIONS™
Allegiant Travel Company
77/922,571
(Notice of Allowance 8-10-10.  First extension request granted.  Statement of
use due 8-10-11)
1,469,736
(Application filed 2-16-2010)
Have registration 1190975
U.S. and Canada applications pending.
MY ALLEGIANT™
Allegiant Travel Company
85/137,715
(9-24-10)
   
U.S. application filed.  Foreign associates to file in Canada and Mexico.
SUNSEEKER®
Allegiant Travel Company
Have registration 3,885,243
No
No
U.S. only.
SUNRISE ASSET MANAGEMENT™
Sunrise Asset Management, LLC
77/922,581
(Notice of Allowance 8-10-10.    First extension request granted.  Statement of
use due 8-10-11)
No
No
Application to be filed in U.S. only.
TRAVEL IS OUR DEAL™
Allegiant Travel Company
85/137,739
(9-24-10)
   
U.S. application filed.  Foreign associates to file in Canada and Mexico.
TRIP FLEX™
Allegiant Travel Company
85/043,677 (Application filed 5-20-10); response to office action due 3-8-11
Application filed 7-27-10; response to office action due 5-18-11
Have registration 1190015
Applications pending in U.S. and Canada.

 
III-3

--------------------------------------------------------------------------------

 
 
U.S. Patents
 
None
 
 
Other Intellectual Property
 
AIS Operating System
 
 
III-4

--------------------------------------------------------------------------------

 

Exhibit I to the
Guarantee and
Collateral Agreement
 
SUPPLEMENT NO. [-] dated as of [-], 20__, to the Guarantee and Collateral
Agreement (the “Guarantee and Collateral Agreement”) dated as of March 10, 2011
(this “Supplement”), among ALLEGIANT TRAVEL COMPANY, a Nevada corporation (the
“Borrower”), each Subsidiary of the Borrower listed on Schedule I thereto (each
such subsidiary individually a “Subsidiary Guarantor” and collectively, the
“Subsidiary Guarantors”; the Subsidiary Guarantors and the Borrower are referred
to collectively herein as the “Grantors”) and THE BANK OF NEW YORK MELLON,
(“BNYM”), as Collateral Agent (in such capacity, the “Collateral Agent”).
 
A.           Reference is made to the Credit Agreement dated as of March 10,
2011 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among the Borrower, the lenders from time to time party
thereto, Citadel Securities Trading LLC, as Administrative Agent and BNYM, as
Collateral Agent.
 
B.           Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement and the
Guarantee and Collateral Agreement referred to therein.
 
C.           The Grantors have entered into the Guarantee and Collateral
Agreement in order to induce the Lenders to make the Loans.  Section 7.14 of the
Guarantee and Collateral Agreement provides that additional Subsidiaries of the
Borrower may become Subsidiary Guarantors under the Guarantee and Collateral
Agreement by execution and delivery of an instrument in the form of this
Supplement.  The undersigned Subsidiary (the “New Subsidiary”) is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Subsidiary Guarantor under the Guarantee and Collateral Agreement in order to
induce the Lenders to make additional Loans and as consideration for Loans
previously made.
 
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
 
SECTION 1.                      In accordance with Section 7.14 of the Guarantee
and Collateral Agreement, the New Subsidiary by its signature below becomes a
Subsidiary Guarantor (and accordingly, becomes a Guarantor and a Grantor),
Grantor and Guarantor under the Guarantee and Collateral Agreement with the same
force and effect as if originally named therein as a Subsidiary Guarantor and
the New Subsidiary hereby (a) agrees to all the terms and provisions of the
Guarantee and Collateral Agreement applicable to it as a Subsidiary Guarantor,
Grantor and Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Grantor and Guarantor thereunder
are true and correct on and as of the date hereof.  In furtherance of the
foregoing, the New Subsidiary, as security for the payment and performance in
full of the Obligations (as defined in the Guarantee and Collateral Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of the New Subsidiary’s right, title and
interest in and to the Collateral (as defined in the Guarantee and Collateral
Agreement) of the New Subsidiary.  Each reference to a “Guarantor” or “Grantor”
in the Guarantee and Collateral Agreement shall be deemed to include the New
Subsidiary.  The Guarantee and Collateral Agreement is hereby incorporated
herein by reference.
 
 
Ex. I-1

--------------------------------------------------------------------------------

 
 
SECTION 2.                      The New Subsidiary represents and warrants to
the Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
 
SECTION 3.                      This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Supplement shall become effective when the Collateral
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof.  Delivery of an executed signature page to this Supplement
by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
 
SECTION 4.                      The New Subsidiary hereby represents and
warrants that (a) set forth on Schedule I attached hereto is a true and correct
schedule of the location of any and all Collateral of the New Subsidiary,
(b) set forth on Schedule II attached hereto is a true and correct schedule of
all the Pledged Securities of the New Subsidiary, (c) set forth on Schedule III
attached hereto is a true and correct schedule of all material Intellectual
Property of the New Subsidiary and (d) set forth under its signature hereto, is
the true and correct legal name of the New Subsidiary, its jurisdiction of
formation and the location of its chief executive office.
 
SECTION 5.                      Except as expressly supplemented hereby, the
Guarantee and Collateral Agreement shall remain in full force and effect.
 
SECTION 6.                      THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 7.                      In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Guarantee and Collateral Agreement shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other
jurisdiction).  The parties hereto shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
 
 
Ex. I-2

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SECTION 8.                      All communications and notices hereunder shall
be in writing and given as provided in Section 7.01 of the Guarantee and
Collateral Agreement.
 
SECTION 9.                      The New Subsidiary agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
 
 
Ex. I-3

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Guarantee and Collateral Agreement as of the day
and year first above written.
 
[NAME OF NEW SUBSIDIARY],
 
By:  ________________________
        Name:
        Title:
 

Legal Name:
Jurisdiction of Formation:
Location of Chief Executive Office:

 
THE BANK OF NEW YORK MELLON,
AS COLLATERAL AGENT
 

 
By:  ________________________
        Name:
        Title:
 
 
Ex. I-4

--------------------------------------------------------------------------------

 
 
Schedule I
to Supplement No. __ to the
Guarantee and
Collateral Agreement
 
LOCATION OF COLLATERAL
 
Description                                                                      Location
 
 
Ex. I-5

--------------------------------------------------------------------------------

 
 
Schedule II
to Supplement No. ____ to the
Guarantee and
Collateral Agreement
 
PLEDGED SECURITIES
 
EQUITY INTERESTS
 
Issuer
Number of Certificate
Registered Owner
Number and Class of
Equity Interests
Percentage
of Equity Interests
         

 
DEBT SECURITIES
 
Issuer
Principal
Amount
Date of Note
Maturity Date
       

 
Ex. V-6

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Schedule III
to Supplement No. ____ to the
Guarantee and
Collateral Agreement
 
INTELLECTUAL PROPERTY
 
[Company]
 
 
U.S. Copyrights
 

 
Licenses/Sublicenses as Licensor on Date Hereof
 

 
Licenses/Sublicenses as Licensee on Date Hereof
 

 
U.S. Trademarks
 

 
Mark
Reg. Date
Reg. No
     

 

U.S. Patents
 
 
Ex. V-7

--------------------------------------------------------------------------------

 
 
Exhibit II to the
Guarantee and
Collateral Agreement
 

 
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
 
 
Ex. II-1

--------------------------------------------------------------------------------

 
 
Exhibit III to the
Guarantee and
Collateral Agreement
 
FORM OF AIRCRAFT SECURITY AGREEMENT
 
[SEE EXHIBIT I TO THE CREDIT AGREEMENT]
 
 
Ex. III-1

--------------------------------------------------------------------------------

 
 
Exhibit IV to the
Guarantee and
Collateral Agreement
 
FORM OF PERFECTION CERTIFICATE
 
 
Ex. IV-1

--------------------------------------------------------------------------------

 
 
Exhibit V to the
Guarantee and
Collateral Agreement
 
FORM OF ACKNOWLEDGEMENT, CONSENT AND CONTROL AGREEMENT
 
The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of March 10, 2011 made by [ ] (the “Pledgor”), the
other grantors thereunder and The Bank of New York Mellon, as Collateral Agent
(the “Guarantee and Collateral Agreement”; capitalized terms used herein but not
defined shall be used herein as defined in the Guarantee and Collateral
Agreement).  The undersigned agrees for the benefit of the Collateral Agent and
the Lenders as follows:
 
1.           The undersigned will be bound by the terms of the Guarantee and
Collateral Agreement and will comply with such terms insofar as such terms are
applicable to the undersigned.
 
2.           The undersigned will note in its records the Lien of the Collateral
Agent in the Collateral.
 
3.           The undersigned does not know of any claim or interest in the
Pledged Securities, except for claims and interests of the parties referred to
in the Guarantee and Collateral Agreement.
 
4.           In the event any Pledged Security is an “uncertificated security”
(as such term is defined in Article 8 of the Uniform Commercial Code in effect
in the State of New York (the “NY UCC”)), [Name of LLC] is the issuer of such
uncertificated security and the Pledgor is the beneficial owner of such
uncertificated security.
 
5.           The State of New York is, and will continue to be, the
undersigned’s jurisdiction for purposes of Section 8-110(d) of the NY UCC so
long as the security interest in the Pledged Securities shall remain in effect.
 
6.           Upon the occurrence and during the continuance of an Event of
Default, the undersigned will comply with all notifications and directions it
receives concerning any Pledged Security originated by the Collateral Agent
without further consent by the Pledgor.
 
 
Ex. V-1

--------------------------------------------------------------------------------

 
 

 
[NAME OF LLC]

By:                                                         
Title:                                                         

Address for Notices:

___________________________
___________________________
Fax:                                                         

 
 
                                                                    

Ex. V-2